The booming demand for soybeans and soybean meal in Ukraine led to a sharp rise in prices

For a month now, there has been an increase in demand for soybeans and soybean meal in Ukraine against the background of an internal deficit caused by increased exports through the Black Sea ports and a decrease in processing volumes due to interruptions in energy supply.

Since the beginning of the year, purchase prices for GMO soybeans have increased by UAH 1,000/t to UAH 16,000-16,800/t, and for non-GMO soybeans to UAH 16,500-17,000/t with delivery to the factory. And processors raised the selling prices of soybean meal by UAH 300-500/t to UAH 17,500-20,000/t EXW. Active purchase of meal by livestock and feed mills against the background of increasing exports contributed to the increase in prices.

On forecasts of a decrease in the soybean harvest in Argentina, exporters intensified purchases and raised the prices of GMO soybeans by $30-50/t to $450-470/t, and for non-GMO soybeans to $480-485/t with delivery to the port. At the same time, demand prices for deliveries to EU countries (Poland, Hungary) increased by only $20-30/t to $480-510/t for GMO soybeans, while demand for non-GMO soybeans remains low against the background of significant stocks.

March soybean futures on the Chicago Stock Exchange rose 3.7% to $565.8/t last week, adding 5.2% for the month.

In the current season, as of January 12, the USA exported 32.2 million tons of soybeans from the USDA forecast of 54.2 million tons (58.7 in 2021/22 MY), which is 4.6% lower than last year's pace.

According to NOPA, US soybean processing fell to a 3-year low of 4.83 million tons in December, while analysts estimated it at 5 million tons. This indicates a decrease in demand for meal and oil due to increased competition from South America.

Brazil has begun harvesting soybeans, which is estimated at a record 153 million tons. Within 1-2 months, the volume of offers on the world market will increase sharply, and importers will reduce purchases in anticipation of a drop in prices, especially given the low levels of prices for vegetable oils.