US Soybean Futures Trend Downward
Despite significant improvements in sowing rates and burgeoning supplies from Brazil, soybean futures in the United States persist on a downward trajectory. As observed on the Chicago exchange recently, July soybean futures dipped by 0.7% to $515.9/t, marking a 5% reduction for the month. The November futures were also impacted, falling by 0.3% to $459.6/t, reflecting a 5.1% drop over the month.
According to the United States Department of Agriculture (USDA), as of May 7, an impressive 35% of the planned acreage intended for soybeans had been planted, a substantial increase compared to 11% last year and the five-year average of 21%. This development indicates that farmers may significantly amplify soybean acreage this season, particularly considering the slow progress with spring wheat planting.
Adjustments in Global Soybean Production Forecasts
The USDA’s May report is expected to bring some alterations to the soybean production forecasts for both Argentina and Brazil. Analysts predict a reduction in Argentina’s forecast from 27 million tons to 24.36 million tons, while Brazil’s production is projected to see a slight increase from 154 million tons to 154.86 million tons. As a result, the ending stocks for the fiscal year 2022/23 are projected to decrease by 1 million tons to 99 million tons, which could potentially exacerbate the global balance.
Soybean Demand in Ukraine Stays Strong
In contrast to the falling soybean prices globally, Ukraine is witnessing a surge in demand for soybeans. This is primarily due to the rise in meal prices from exporters, which is keeping purchase prices for genetically modified soybeans at a relatively high level of UAH 16,700-17,800 for factory delivery. This is despite the drop in rapeseed and sunflower prices to UAH 14,000-15,000/t with factory delivery.
Steady export demand for soybeans has helped maintain prices at Danube ports at $460-475/t for delivery to Rennes or Izmail. The asking prices from European buyers, meanwhile, hover around €400-450/t for delivery to EU countries.
Soybean Imports to the EU Increase
Between May 1-7, the European Union countries experienced a significant uptick in soybean imports, increasing by 72% to 365,073 tons compared to the previous week. Overall, since the start of the season, the EU has imported 10.66 million tons of soybeans, although this is still 11% less than the figure from the previous year. Notably, the United States has been the most significant supplier, accounting for almost 46% of purchased soybeans, followed by Brazil (33%) and Ukraine (11%).
Brazil’s Soybean Exports
Brazil, one of the major soybean producers, is projected to export 12.1 million tons of soybeans in May, according to forecasts by ANEC experts. Although this is 1.8 million tons lower than the April figure, it surpasses the 10.3 million tons shipped in May 2022. If the forecast is realized, the total soybean exports from Brazil in 2023 will reach 49.93 million tons, exceeding the 45.19 million tons exported in the first five months of 2022. The primary buyer of Brazilian soybeans continues to be China, which purchased 73% of the volume exported from January to April. In addition to soybeans, Brazil