Prices for soybean meal in Argentina for the first time in two years fell below the stock exchange in Chicago

Export prices for soybean meal in Argentina for the first time in two years fell below the futures on the Chicago stock exchange amid low demand and the arrival of the new soybean crop.

According to S&P Global Commodity Insights, Argentina is completing the harvest of soybeans, which in 2023/24 MY will reach 50.5 mln tonnes, which is almost twice the harvest of the previous season, which suffered from adverse weather conditions. The volume of soybean processing will also increase by 40% to 40.5 mln tonnes, and in June will reach its maximum value, which will further increase the pressure on prices.

Argentina is one of the world’s largest exporters of soybean meal and oil. According to the forecast of S&P Global, in 2023/24 MY the country will increase the exports of soybean meal by 50% to 28.5 mln tonnes compared to the previous season.

Currently, August futures for meal on CBOT in Chicago are trading at 383.5 $/t, while August deliveries on FOB Up River are offered at 2 $/t cheaper. And the last time the discount of 5 $/t was observed on September 6, 2022, – reports Platts.

After several months of higher prices than in neighboring Brazil, export demand in Argentina declined slightly, which negatively affected the freight market.

Brazil is stepping up exports at slightly lower prices amid the devaluation of the local currency, as the Brazilian real fell by 5.2% from 5.2322 to 5.5023 per US dollar during the month.

According to Platts, soybean prices in Brazil on FOB Paranagua basis are also 2 USD/t lower than in Chicago. This discount compared to futures on CBOT in June was recorded for the second time. Brazil before Argentina has completed the harvest of soybeans, which allowed it to accelerate the supply of soybeans and soybean meal to the world market, while Argentina is increasing exports only now.

The recovery of the soybean harvest in Argentina had a positive impact on the processing rates and prices. Last year, at this time, the spot FOB Up River basis was +13 USD/t.

Low prices for soybean meal will soon increase pressure on prices of feed crops, in particular barley and corn.

Tags: soybean meal, prices, Argentina