Soybean prices have taken a hit as the harvest in South America concludes and U.S. planting speeds up. This market shift is influenced by various factors including strong competition and weather conditions.
South American Harvest Update
The soybean harvest in Brazil is nearing completion, with 98.1% of the 45.7 million hectares harvested as of May 26, according to Conab. The forecast for Brazil’s harvest remains at 147-152 million tons.
In Argentina, the Buenos Aires Grain Exchange reports that 78% of the soybean area had been harvested by May 22. The harvest forecast has been adjusted to 50.5 million tons, slightly above the USDA’s May estimate.
U.S. Planting Progress
The USDA Crop Tour indicates that as of May 26, 68% of the planned soybean area in the U.S. has been planted, compared to 78% last year and the five-year average of 63%. Moderate temperatures and periodic rainfall have been favorable for sowing and crop development.
Export Dynamics
For the 2023/24 marketing year, as of May 23, U.S. soybean exports reached 39.97 million tons, which is 17.5% lower than last year. The strong export competition from Brazil, which ships 13-14 million tons of soybeans monthly, limits U.S. exports to around 1 million tons per month.
Market Reactions
On the Chicago exchange, July soybean futures dropped by 1.3% to $446.1 per ton (-2.6% for the week, +4.2% for the month), and November futures fell by 1.2% to $439.7 per ton (-1.8% for the week, +3.2% for the month). These declines are due to accelerating sowing rates and slowing exports.
In Ukraine, as of May 23, 1.83 million hectares of the projected 2 million hectares have been sown with soybeans. Recent rains are expected to accelerate sowing and aid crop development.
Price Trends and Export Demand
Export demand prices for GMO soybeans remain at $400-415 per ton with delivery to Black Sea ports, and $460-465 per ton for non-GMO soybeans with delivery to Danube ports. Traders are finishing their soybean purchases and beginning to buy new crop canola.
Processors are buying GMO soybeans at UAH 18,000-18,300 per ton and non-GMO soybeans at UAH 19,200-19,500 per ton with delivery to the factory. However, they face difficulties selling meal and pulp due to lower prices in the EU compared to Ukraine.
The soybean market is under significant pressure due to the completion of the South American harvest and the acceleration of U.S. planting. The strong export competition from Brazil and the expected increase in canola supplies from Canada are likely to keep prices subdued in the near term. Stakeholders should monitor these developments closely to navigate the changing market dynamics effectively.
Source:GrainTrade
The following reports may be of interest to you:
Related posts:
Argentina Faces Soybean and Corn Harvest Delays Due to Adverse Weather
United Soybean Board Announces Departure of CEO Polly Ruhland
$13.6 Million in Grants Boost Technical Assistance for Farmers Adopting Cover Crops Through Farmers for Soil Health
Soybean Harvest in Brazil Completed by 82%
Brazil’s Soybean Harvest Was 5% Ahead of Schedule
Argentina Agrarians Slowed Down the Pace of Crop Sales
December 2021 Markets with Mac
Companies Share Success Switching to Soy