Rising Soybean Prices Amid Crop Uncertainty
In Ukraine, the combination of high rapeseed prices and lower forecasts for soybean and sunflower crops due to heat in the south and east is keeping starting prices for soybeans at a high level. Export purchase prices for new crop soybeans, set for delivery to Black Sea ports in October-November, have recently risen to $385-390 per ton, despite a previous dip to $355-370 per ton in recent weeks and declining exchange quotations.
Cautious Contracting by Farmers
While exporters are actively contracting new crop soybeans, many Ukrainian farmers are hesitant to make deals due to the uncertainty surrounding crop yields. Processors are currently offering UAH 16,000-17,500 per ton for old crop soybeans with delivery to the factory. However, producers are holding out for higher prices, expecting soybean prices to rise to UAH 19,000-20,000 per ton, following the trend of sunflower prices, which have already reached UAH 19,000-20,000 per ton ( $462-487 per ton)
Global Market Pressures
Meanwhile, November soybean futures in Chicago fell by 7.8% over the past month to $374 per ton, influenced by improvements in the condition of the US soybean crop and an optimistic US harvest forecast. Additionally, global soybean prices are under pressure due to declining demand from China.
According to the State Customs Service, China’s soybean imports for the first seven months of 2024 fell by 1.3% to 58.33 million tons compared to the same period in 2023. However, in July alone, China imported 9.85 million tons of soybeans, a 2.9% increase from July 2023.
China’s Soybean Stocks and Brazil’s Record Exports
The China National Grain and Oil Information Center reported that in July, soybean stocks at processing plants exceeded 7 million tons, with soybean meal stocks increasing by 29% to 1.38 million tons—an 86.5% rise compared to July 2023. In August, an additional 8 million tons of soybeans are expected to arrive in Chinese ports, with another 7.6 million tons anticipated in September.
Meanwhile, Brazil exported a record 11.2 million tons of soybeans in July, up from 9.7 million tons in July 2023, largely driven by strong demand from China.
The Ukrainian soybean market is currently navigating a complex environment, with high starting prices supported by strong rapeseed prices and concerns over lower crop yields. However, global market pressures, particularly from China’s fluctuating demand and Brazil’s record exports, are likely to influence future price movements. Farmers and exporters in Ukraine must carefully consider these factors as they plan their strategies for the coming months. The balance between domestic uncertainties and global market dynamics will be crucial in determining the trajectory of soybean prices in Ukraine.