Soybean prices are falling amid declining demand from China

Due to the decline in soybean exports from Brazil to China, the fall in stock prices slowed as the market received support in the form of increased domestic soybean processing in the United States and Brazil.

According to Oil World, in May, Brazil reduced soybean exports compared to the same period last year from 14.9 to 3-year low for this period -10.6 million tons, including China – from 10.1 to 6.4 million tons, the EU – from 1.5 to 1.4 million tons, Turkey – from 627 to 296 thousand tons, Thailand – from 497 to 231 thousand tons.

At the same time, due to a significant increase in domestic processing, the country has intensified exports of soybean products. Thus, in May, Brazil exported 2.02 million tons of soybean meal (1.7 million tons in May 2021), of which 916 thousand tons to the EU, 348 thousand tons to Indonesia and 323 thousand tons to Thailand, as well as 262 (181 ) thousand tons of soybean oil, of which 148 thousand tons to India.

In total, for 5 months of 2022, Brazil increased compared to the same period last year, exports of soybean oil by 60% to a record 957 thousand tons, including India – by 313% to 640 thousand tons, and soybean meal by 27.8% to 8 , 2 million tons, in particular to the EU – by 24.5% to 3.7 million tons.

NOPA reported that in May, soybean processing in the United States reached a record 4.655 million tons for this month, which is lower than analysts’ forecasts, but 0.76% higher than in April. Stocks of soybean oil amounted to 805.4 thousand tons with expectations of 800 thousand tons.

The July soybean futures in Chicago fell 2.7% to $ 622 / t in the week and the November soybean futures fell 3% to $ 560 / t in the week, although they rose 2% and 0.3% in the month, respectively.

According to the US IAU, as of June 12, soybeans have sown 88% of the area (93% last year), and 70% of crops are in good or excellent condition.

Soybean prices to China fell 4.7% in July last week after declining futures on the Chicago SWOT amid accelerating US sowing and lower FOB Santos prices due to increased sales by Brazilian farmers due to the strengthening dollar against the real .

According to S&P Global Commodity Insights, on June 15, Platts reduced soybean prices in China to $ 728.63 / t, while the processing margin in June was minus $ 21.69 / t.

The Argentine government will increase biodiesel requirements to 12.5% over the next two months, boosting domestic demand for soybean oil and soybeans.

Tags: prices, soybean, India, Thailand, USA, Argentina, China, Turkey, Brazil, EU