Impact of South American Harvest
The completion of soybean harvests in Brazil and Argentina, along with increased exports, continues to limit export demand for soybeans in Ukraine and the USA. This has led to a noticeable decrease in prices.
Current Price Trends
Export demand prices for GMO soybeans have dropped amid reduced purchasing activity by companies. Prices are now around $410 per ton or 18,500-19,000 UAH per ton delivered to Danube ports. Purchases in Black Sea ports have practically ceased as terminals prepare to receive new crops of rapeseed and barley. Exporters are offering around $420-440 per ton for soybeans delivered to Poland and Romania, but high transportation costs (around $60-80 per ton) make exports in this direction unfeasible.
Processors quickly reacted to the drop in export demand by reducing purchase prices for GMO soybeans by 500-1000 UAH per ton since the beginning of the month, now ranging from 17,000-18,500 UAH per ton delivered to the plant. However, they continue to face difficulties selling soybean meal and cake. Only the sustained demand for soybean oil, which has risen in price following sunflower oil, supports soybean prices.
Non-GMO Soybean Prices
Export demand prices for non-GMO soybeans have also decreased to $450-460 per ton or 20,800-21,000 UAH per ton delivered to Danube ports. There is a slight increase in demand for deliveries to the western border at prices around $450-465 per ton DAP Poland and Hungary.
Soybean Sowing in Ukraine
As of June 15, Ukraine has sown 2.03 million hectares of soybeans out of the forecasted 2 million hectares (compared to 1.8 million hectares in 2023). While some analysts predicted an increase in sowing areas to 2.2-2.4 million hectares at the expense of corn areas, farmers have sown as much corn as last year.
Global Context
In Brazil, the soybean harvest is complete, with yield forecasts remaining at 147-152 million tons, though some local analysts are raising their forecasts. The Buenos Aires Grain Exchange reports that soybeans in Argentina have been harvested from 99% of the areas, maintaining the yield forecast at 50.5 million tons, slightly exceeding the June USDA estimate.
According to NASS, as of June 16, 93% of the planned soybean areas have been sown in the USA (97% last year and 91% on average over five years as of this date), with 93% germinated (95% last year). The rating of crops in good and excellent condition decreased by 2% to 70% compared to 54% last year.
US and China Soybean Exports
Since the beginning of the 2023/24 marketing year, as of June 13, US soybean exports total 40.88 million tons, which is 16.6% less than last year’s pace, with a USDA forecast of 46.3 million tons. China’s soybean imports in May amounted to 10.2 million tons, with 8.8 million tons coming from Brazil and only 1.27 million tons from the USA.
Futures and Market Outlook
Yesterday, July soybean futures in Chicago fell by 1.7% to $424.5 per ton (-7% for the month), while November futures dropped by 1.4% to $410.3 per ton (-8.8%) amid favorable conditions for soybean planting in the USA. The start of new rapeseed crop deliveries will increase the supply of rapeseed meal, further reducing the demand for soybean meal in the EU, exerting additional pressure on soybean prices in Ukraine, especially considering that new crop soybean quotations are 4% lower than the old crop.
The increased supply from South America continues to exert downward pressure on soybean prices in Ukraine. With the approaching harvest of new crops and the shifting market dynamics, stakeholders must navigate these changes strategically to mitigate the impact on their operations.