Soybean prices in Ukraine remain low due to falling export demand

The procedure for exporting soybeans and rapeseed from Ukraine without paying duties by producers has not yet been regulated, and in order to export, customs requires producers to pay a 10% “guarantee payment to customs” as security, and after the export is completed, they promise to return these funds within 30 days.

To obtain a CCI (Chamber of Commerce and Industry of Ukraine) conclusion, the producer must provide about 12 documents, and when determining the volume of products grown by the producer, the CCI considers the maximum yield to be no more than 3.5 t/ha. Such procedures discourage producers from exporting grain, and they are increasingly inclined to sell soybeans and rapeseed for hryvnia to processors.

During the week, export prices for GM soybeans remained at $388–390/t or UAH 16,800–17,000/t, and for non-GM soybeans at UAH 18,000–18,200/t or USD 420–430/t with delivery to Black Sea ports. The number of traders buying soybeans is decreasing as competition on the world market increases and world prices fall under the pressure of favorable planting conditions in South America and active harvesting in the USA.

November soybean futures in Chicago fell 1.6% to $370/t (-5.3% per month) during the week against the backdrop of active harvesting (about 60% of the area has been threshed) and low soybean export rates in the US. From September 1 to October 9, the US exported 4 million tons of soybeans, which is 26% lower than last year’s rate, as China continues to refrain from purchasing American soybeans.

In Ukraine, as of October 9, 2.7 million tons of soybeans were threshed from 56% of the areas with a yield of 2.28 tons/ha, while last year on this date 4.8 million tons of soybeans were harvested from 80% of the areas with a yield of 2.29 tons/ha. Dry weather will set in Ukraine this week, which will allow farmers to accelerate the harvesting of soybeans and sunflowers and increase supply on the market.

During the week, processors offered UAH 16,500–17,000/t for GMO soybeans, and UAH 18,500–18,700/t for non-GMO soybeans with delivery to the factory (protein 39–40%). In the event of a sharp increase in soybean offers, processors will limit purchases, as they have already purchased large volumes of sunflower at high prices.

Favorable conditions for soybean planting in South America continue to improve crop forecasts, increasing pressure on world soybean prices and boosting supplies of old-crop soybeans. According to the ANEC forecast, Brazil will export 7.3 million tons of soybeans in October, which will provide the necessary raw material for China, which is not resuming purchases of soybeans from the United States.