Soybean prices in Ukraine decline amid global market pressure and export restrictions

Higher global soybean production forecasts and favorable weather conditions in the US and Brazil are putting additional pressure on futures and purchasing prices in Ukraine. According to updated USDA estimates, the US soybean harvest could reach 124.15 mln tons, up 0.73 mln tons from the previous forecast and 8 mln tons above last season. Against this background, November soybean futures in Chicago fell by 2.4% over the past week to $464/t, bringing their monthly decline to 5.3%.

A slowdown in US soybean crushing is adding further pressure to global prices. In September, crush volumes declined by 4.5% to 5.34 mln tons, significantly below analysts’ expectations. Meanwhile, US soybean oil stocks fell by 12.4% from August to 478 thsd tons, their lowest level since November 2014. Stocks were also down 15.3% year-on-year, potentially indicating sustained demand for soybean oil, particularly from the biofuel industry.

In Ukraine, soybean prices are declining more slowly than rapeseed and sunflower seed prices, although logistical constraints continue to limit exports. Disruptions to maritime shipments and rising road and rail transportation costs to the EU are weakening the competitiveness of Ukrainian products. Over the past week, processors maintained purchasing prices for GM soybeans at UAH 15,500–17,000/t delivered to the plant. Meanwhile, the decline in sunflower seed prices to UAH 16,000–16,500/t and lower sunflower meal prices could increase pressure on soybean meal prices and, subsequently, on soybean prices.

In the export market, prices for GM and non-GM soybeans have almost converged. Purchasing prices for rail deliveries to Ukraine’s western border stand at $420–440/t. For deliveries to Odesa, traders are offering around $380/t, or UAH 17,000–17,200/t, while soybeans are being purchased at $400–410/t in Danube ports. Price differences between export routes reflect the impact of logistics costs and limited transport capacity on purchasing prices.

Meanwhile, Ukraine’s soybean harvest prospects remain below earlier expectations. As of October 12, farmers had harvested 1.169 mln ha, or 73% of the planned area, producing 2.56 mln tons of soybeans at an average yield of 2.19 t/ha. The expected reduction in total production could partially limit further declines in domestic prices, as processors seek to build sufficient raw material stocks. However, developments in the Ukrainian soybean market will continue to depend on global futures, export demand and logistics capacity.

Tags: Ukraine, prices, soybean