Despite the delayed harvest in Argentina, soybean prices remain under pressure from low demand from China

It rained in most agricultural areas of Argentina last week, which delayed the harvest of soybeans and corn, but improved conditions for sowing winter wheat. This week, the intensity of precipitation will decrease, which will speed up the harvest.

the May soybean futures on the Chicago stock exchange yesterday rose 0.9% to 426 $/t amid delays in the supply of soybeans from Argentina, but still remain under pressure from reduced demand from China.

According to the Grain exchange of Buenos Aires BAGE, as of April 17, soybeans in Argentina was harvested on 13.9% of the area (35.9% on average for 5 years), and corn – by 17.2%, with an average yield of 8.79 t/ha.

As a result of the rains, the fields have been overrun by cicadas that spread corn diseases. Against this background, the Rosario BGR exchange lowered its corn harvest forecast by 6.5 mln tonnes to 50.5 mln tonnes, and the Buenos Aires exchange – to 49.5 mln tonnes. The forecasts may be lowered again, as the disease has not been overcome yet. Currently, the losses from cicadas are estimated at $ 1.268 billion.

Delayed harvesting in Argentina keeps prices for soybeans and corn from falling due to lower demand from China due to reduced pork consumption.

In the 1st quarter, China reduced the imports of soybeans from the U.S. by 50% to 7.14 mln tonnes compared to the same period last year, and increased the supplies from Brazil by 155% to 9.99 mln tonnes. At the same time, in March, amid high prices and low demand from pig producers, soybean imports decreased (compared to March 2023) to 4-year low of 5.54 million tons, in particular from the United States – almost doubled to 2.18 million tons, while from Brazil increased by 81% to 3.02 million tons.

Also in March, China reduced (compared to February) the supply of corn from the United States by 78% to 109.7 thousand tons, as buyers preferred cheap corn from Brazil, imports of which increased by 72% to 1.18 million tons.

In 2023/24 MY, the U.S. exported 38.488 mln tonnes of soybeans, down 18.2% from last year. At the same time, the rate of soybean planting in the United States is twice the 5-year average and as of April 21 reached 8%, which will increase pressure on quotations in the near future.

Tags: China, Brazil, prices, soybean, USA, supply and demand balance, Argentina