Fall in soybean quotes to 4-year low increases pressure on soybean prices in Ukraine

Favorable weather in South America and reduced soybean processing in the US led to a drop in soybean futures in Chicago to a 4-year low.

 

This week, January soybean futures on the Chicago Board of Trade fell 3.8% to a 4-year low of $349.7/t (-4.8% for the month, -35% for the year).

 

According to the NOPA association, the volume of soybean processing in the US in November decreased by 11% compared to October to 5.287 million tons, while traders predicted it at 5.35 million tons.

 

The high pace of soybean exports from the US has not yet supported quotes, as the market expects a reduction in soybean supplies to China in the second half of the season due to a possible aggravation of trade relations between the countries after Trump came to power.

 

During December 6-12, soybean exports from the United States decreased by 3.5% compared to the previous week to 1.676 million tons, of which 1.03 million tons were purchased by China. In total, the United States exported 25.23 million tons of soybeans in the 2024/25 MY, which is 19.1% ahead of last year's pace.

 

According to Conab, 97% of the planned area was sown with soybeans in Brazil as of December 15 (95% last year), and thanks to abundant rainfall in October-December, the crops are in good condition. AgRural forecasts that Brazil will harvest 171.5 million tons of soybeans in the 2024/25 MY, compared to 154 million tons in the previous season. In Argentina, 55% of the area is sown with soybeans, which corresponds to the average sowing rate.

 

Increased imports of soybeans and soybean meal to the EU are reducing demand for Ukrainian soybean meal and oil from European buyers.

 

In the 2024/25 MY (as of December 16), the EU increased soybean imports by 16% compared to the corresponding period of the previous season to 6.27 million tons, of which 2.7 million tons were supplied from the USA, 2.5 million tons from Brazil, 600 thousand tons from Ukraine. Imports of soybean meal during this period increased by 32% to 9.08 million tons, of which 4.4 million tons were supplied from Brazil, 3.55 million tons from Argentina and 200 thousand tons from Ukraine. The main buyers of meal were Poland (1.7 million tons), Spain (1.44 million tons) and the Netherlands (1.27 million tons).

 

Under the pressure of low world prices for soybeans in the Black Sea ports of Ukraine, export demand prices for GMO soybeans remain at a low level of $365-375/t or UAH 17,500-17,800/t, while processors buy it at UAH 17,000-17,800/t, paying a premium for high-protein soybeans.

 

Export demand prices for non-GMO soybeans are $410-420/t or UAH 19,500-20,000/t with delivery to ports or the western border, while processors are not very interested in it and offer no more than UAH 18,000-18,800/t with delivery to the factory.

 

The soybean market will remain uncertain until the end of January, until the harvest begins in Brazil and the new US President takes office.