Ukrainian soybean prices may fluctuate due to crude oil

The Ukrainian soybean market is showing a significant increase in prices during the current marketing season, but in the short term it may be affected by the situation on the global energy market. In particular, the dynamics of soybean prices largely depends on crude oil quotes, which determine the situation in the biofuel sector and general trends on agricultural exchanges. This was reported by the analytical department of the agricultural cooperative PUSK, established within the framework of the All-Ukrainian Agrarian Council.

Currently, export prices for Ukrainian soybeans significantly exceed the levels of the beginning of the season. If in September-November soybeans were traded at approximately $390–395/t, then current prices in ports have reached $450–460/t for GM soybeans and $475+/t for non-GM soybeans. Thus, the increase in cost since the beginning of the season is already $60–70/t. “If prices add another $10–15 per ton, we can actually talk about almost $100 growth per season,” PUSK analysts note.

Despite attractive prices, the export rate of Ukrainian soybeans is gradually decreasing. According to the latest data, the volume of shipments is about 48 thousand tons, which is significantly less compared to the beginning of the marketing year. Several factors are influencing the reduction in exports: an export duty of 10%, a reduction in domestic stocks, and the high price of Ukrainian soybeans on world markets. “Ukrainian soybeans continue to be the leader in terms of price in key markets. For example, in the Turkish market, it costs almost $500/ton, while Brazilian soybeans are traded at $470–480/ton,” experts explain.

At the same time, price support remains on the domestic market due to limited supply. According to analysts, around May, soybean stocks may fall below 1 million tons, which will actually mean almost complete exhaustion of the old crop supply.

“Around May, soybean stocks may fall below 1 million tons. Factories will need to work until the new crop, so they may be willing to pay high prices. It is possible that processors may raise the price of soybeans above UAH 21,000/ton,” analysts believe. At the same time, the short-term market situation will largely depend on the situation on the global energy market. In particular, soybean quotes are traditionally correlated with oil prices, since soybean oil is actively used in the production of biodiesel. Therefore, in March and the first half of April, short-term price fluctuations and even price declines are possible on the market. At the same time, in the medium term, the market will remain supported by limited soybean reserves and stable demand from domestic processors.

Tags: Ukraine, prices, soybean