Soybean prices in Ukraine are rising following stock market quotes

Against the backdrop of delayed harvest and reduced harvest potential in Ukraine, competition for soybeans between exporters and processors has intensified, leading to further price increases.

As of November 6, 4.306 million tons of soybeans were threshed from 84% of the area or 1.83 million hectares in Ukraine with a yield of 2.35 tons/hectare, while last year at this time 5.82 million tons of soybeans were threshed from 96% of the area with a yield of 2.28 tons/hectare.

During the week, export prices for GM soybeans increased by another $3-5/t to $408-410/t or UAH 17,700-17,800/t, and for non-GM soybeans – by $10/t to $435-445/t or UAH 18,700-19,200/t with delivery to Black Sea ports against the backdrop of very low supply from producers who are busy harvesting late crops and do not want to sell soybeans under currency contracts due to the complexity of the export procedure. The pace of soybean exports from Ukraine remains low, and an increase in export supplies is not expected due to high competition on the world market, which will intensify in January-February.

At the same time, demand from processors was even higher, so they increased prices with delivery to the factory by 500-600 UAH/t to 17,200-17,800 UAH/t for GM soybeans and 18,800-19,000 UAH/t for non-GM soybeans in order to attract maximum volumes from producers.

This sharp increase in soybean export prices was caused by a sharp increase in soybean quotes in Chicago by 10% in one month against the backdrop of an agreement for China to resume purchases of soybeans from the United States.

November soybean quotes on the Chicago Board of Trade rose 10% to $410/t in a month, but last week quotes fluctuated 2-2.5% up and down under pressure from information about China’s promise to buy 12 million tons of soybeans from the United States. However, after the fall in the price of Brazilian soybeans caused by this news, China purchased about 1 million tons of cheap soybeans from Brazil. At the end of the week, information again appeared that a Chinese state-owned company had purchased $5 billion in American agricultural goods, but again without specific volumes for soybeans.

China is expected to continue to buy expensive American soybeans in anticipation of a new record soybean harvest in Brazil, estimated at 170-175 million tons (compared to 167 million tons last season) and expected to hit the market by the end of January.

Recall that previously the US exported 20-30 million tons of soybeans to China per year, and Trump’s big agreement to supply 12 million tons of soybeans to China this season will not really help American farmers sell a fairly good soybean harvest, which will match last year’s level.

Tags: Ukraine, prices, soybean