Purchase prices for soybeans in Ukraine are increasing, while world prices remain stably low

Despite the stable global soybean prices and the forecast of an increase in the harvest in Brazil, the export demand for soybeans and its prices are growing in Ukraine.

The Ukrainian government's struggle with cash purchases has halted many suppliers, especially those working in Danube ports, disrupting delivery timelines and increasing demand for soybeans to fulfill export contracts. Against the background of growing demand, farmers stopped sales, which led to another price increase.

In two weeks, soybean prices rose from $360-365/t to $390-395/t or UAH 16,400/t with delivery to the Danube ports and $375-385/t or UAH 16,000/t with delivery to the Black Sea ports. At the same time, demand prices for deliveries to Romania and Poland remained at $390/t, and to Italy - $420-430/t, as European buyers closed their demand with cheap soybeans from Brazil.

According to the European Commission, as of October 29, soybean imports to the EU amounted to 3.56 million tons (3.6 million tons last year), of which Brazil supplied 1.66 million tons, the United States - 1.54 million tons, and Ukraine - 196,000 tons.

November soybean futures on the Chicago Stock Exchange rose 0.5% to $479.1/t this week (+2.3% on the month) on the back of active processing in the US, although growth is limited by forecasts of a larger crop in Brazil.

According to the NASS monthly report, soybean processing in the US in September increased by 3.4% compared to August to 4.75 million tons, which is 4.3% higher than in September 2022. And soybean oil stocks amounted to 726 thousand tons in compared with 803 thousand in August and 909 thousand in September 2022.

Exports of soybeans from the United States in the current season amounted to 9.863 million tons, which corresponds to last year's 9.82 million tons. At the same time, Brazil in October exported a record 5.53 million tons of soybeans for this month, which reduces supplies from the United States.

According to the MSG of China, in 2023 the country imported 77.8 million tons of soybeans, which is 14.4% higher than in 2022. It is expected that thanks to the supply of cheap and high-quality Brazilian soybeans, the total import of soybeans in 2023 will amount to 105 million tons and will exceed the 2022 level by 15%.

Experts at StoneX Brazil have raised their 2023/24 soybean production forecast in Brazil from 164.1 to 165 million tonnes (USDA 163 million tonnes) as farmers reduce first-crop corn acreage in favor of soybeans. The forecast for corn production of the first harvest was reduced from 27.5 to 26.8 million tons.

Increased rainfall in Argentina and Brazil in the near term will support planting and development of soybean crops, which will continue to hold back global price growth.