South America completes soybean harvest and confirms worst crop forecasts

World prices for soybeans and soybean products are gradually rising as they harvest in South America, which confirms the worst production forecasts. Russia’s war against Ukraine is increasing global demand for soybeans and soybean oil due to reduced supplies of sunflower oil from the Black Sea region.

According to AgRural, soybeans in Brazil have been harvested in 69% of the area, which is 10% ahead of last year’s rate, and in the main producing states of Mato Grosso and Mato Grosso do Sul, the work is almost complete.

Rains slow down harvesting, but promote the development of second-harvest corn crops. Due to the lack of precipitation in December and January, soybean yields this season were lower than expected, so Conab experts left the forecast for soybean production in Brazil in 2021/22 MY at 122.8 million tons, while the USDA in March estimated it at 127 million tons

The Buenos Aires Grain Exchange (BAGE) has lowered its forecast for soybean production in Argentina by 1.1 million tons to 42 million tons, which will also yield to the USDA’s March forecast of 43.5 million tons.

According to analysts at the Paraguayan Grain and Oil Producers Association (APS), the country’s soybean harvest in 2021/22 will be the worst in history and will not exceed 3 million tons, which is 1 million tons less than last year, although the USDA in March predicted it within 5.3 million tons

May soybean futures in Chicago rose 1.7% to $ 623.5 / t on Monday, but added only 1.7% to the month as China’s demand remains low.

At the same time, May soybean oil futures rose 3% to $ 1,640 / t, adding 5.7% for the month amid rising demand from India due to a lack of sunflower oil supplies from Ukraine and declining supplies from Russia.

Russia’s military invasion of Ukraine continues to negatively affect the world economy, and analysts cannot predict when this senseless war will end.

Ukraine is gradually resuming the work of processing plants in regions where there is no fighting. Processors buy soybeans in limited batches with delivery to the plant at a price of 16000-16500 UAH / t. However, processing volumes remain low due to lack of export supplies and low demand for pulp and meal. Demand prices for soybean pulp with delivery to the western border are $ 460-480 / t, and for soybean oil – $ 1350-1400 / t.

Sunflowers are almost never bought by processors, as they have significant reserves of meal and oil, which they try to sell through the ports of Romania and Poland.

GrainTrade 

Tags: Argentina, Ukraine, Russia, China, Romania, Brazil, prices, Poland, soybean