An increase in soybean harvest forecasts increases the pressure on prices, in particular in Ukraine

In Brazil, on April 11, soybeans were threshed on 84% of the area (86% last year), and the good yield made it possible to increase production forecasts. Conab predicts that the state of Rio Grande do Sul will increase soybean production by 68% compared to last year and become the second largest producer after Mato Grosso, compensating for drought losses in the central-western regions.

So far, farmers in Rio Grande do Sul have sold only 16% of their crop against the background of low soybean prices, while usually 40-45% have already been sold by the end of April.

Experts of the Cotrisal company, which works with 11,000 farmers in the region, explain the low sales to a reduction in export demand and higher than last year's stocks at producers. We will remind that last year the ports were overloaded with significant export volumes of soybeans and corn.

The agency Safras & Mercado raised its forecast for the soybean harvest in Brazil from 148.6 to 151.2 million tons, amid high yields in the southern states.

In FY 2023/24 (as of April 11), the US exported only 38 million tons of soybeans out of USDA's projected 46.3 million tons (54.2 million tons in FY 2022/23), which is 18.5% lower than last year's pace and increases pressure on prices.

May soybean futures on the Chicago Stock Exchange fell 1.4% to $425.6/t yesterday (-2% for the week) on the back of improved crop forecasts in South America.

The president of the Argentine Chamber of Petroleum Industry, Ciara-CEC, Gustavo Idigoras, said that Argentina is completing the procedure for obtaining certificates for the export of soybean products to the United States, which is lowering the price of soybeans in the United States, especially since last year the approval of the use of rapeseed oil from Canada for the production of biodiesel significantly collapsed the quotation soybean oil.

In Ukraine, purchase prices for GMO soybeans remain at the level of $400-410/t with delivery to Black Sea ports, but against the background of the increase in the dollar exchange rate to UAH 39.59/$, hryvnia prices have risen to UAH 18,300-18,400/t. Processors increased prices by 300-400 UAH/t to 17,300-17,800 UAH/t with delivery to the plant. Competition between processors and exporters has intensified, but in May soybean products from Argentina and Brazil will enter the world market, which will complicate exports.

Demand prices for soybeans delivered to Italy remain at €430-440/t DAP, but expensive logistics make exports unviable. As of March 27, the EU imported 9 million tons of soybeans, including 5 million tons from the USA, 2.5 million tons from Brazil, and only 680 thousand tons or 11% - from Ukraine.