Soybean prices resumed growth amid a delay in planting in Brazil

Soybean prices rose 2% since Monday amid weak rainfall in central Brazil, delaying planting and reducing crop potential.

January soybean futures on the Chicago Stock Exchange rose 2% to $502.4/t yesterday, recovering from the previous week’s decline. However, their growth was limited by the reduction of soybean exports from the USA, which for November 10-16 decreased compared to the previous week by 22.4% to a 1.5-month low of 1.609 million tons, and in total for the season reached 15.913 million tons, which 8.3% is inferior to last year’s pace and is the lowest indicator in the last 3 years. Active soybean exports from Brazil increase competition for soybeans from the United States.

In October, China imported 5.16 million tons of soybeans, of which 4.81 million tons came from Brazil (71% more than last year) and only 228 thousand tons from the USA (3.3 times less than last year). For 10 months of 2023, soybean imports from Brazil increased by 21% to 59.68 million tons compared to the same period last year, while imports from the United States decreased by 1.8% to 18.78 million tons.

According to the agency, in Brazil on November 16, 68% of the planned area was sown with soybeans (80% last year), which is the worst indicator since the 2019/20 MY. Sowing is delayed by excessive rainfall in the south of the country and a lack of moisture in the northern and northeastern regions. In the central state of Mato Grosso, as a result of two weeks of heat, part of the crops will have to be replanted. Precipitation will increase over the next 3-4 days, but not enough to eliminate dry conditions in the central regions.

Argentina’s new president is promising to liberalize agricultural exports, putting pressure on global soybean prices in the near term as local farmers have held back sales amid a weak peso against the dollar, leaving them with unsold stocks.

In Ukraine, soybean prices remain at a high level thanks to active export demand, in particular from Egypt and Turkey. In October, soybean exports increased compared to September from 200 to 436 thousand tons (214 thousand tons in October 2022). If in 2021/22 MY Ukraine exported 1.4 million tons of soybeans, then in 2022/23 MY Ukraine already exported 3.1 million tons, and in 2023/24 MY Ukraine plans to ship 3.5 million tons of oilseeds.

Currently, Ukraine has collected 4.75 million tons of soybeans (3.7 million tons last year), of which 1-1.3 million tons will be processed. Exporters have increased the purchase prices for GMO soybeans to $400-420/t or $16,500-17,000 UAH/t with delivery to the port or to the border, therefore processors also raised prices to UAH 16,500-17,000/t with delivery to the factory, which gives additional profits to farmers and encourages them to expand sowing areas in the next season.

According to experts’ estimates, Egypt will import 1.5 million tons of soybeans in 11 months of 2023 compared to 4 million tons for this period last year. At the same time, soybean deliveries from Ukraine increased from 42 to 586 thousand tons during this time.