Acceleration of harvesting in Brazil collapsed exchange prices for soybeans and canola

The global oil market is expecting a record soybean harvest from Brazil, which is the main driver of price pressure. Even Argentina's farmers' strike has not yet affected prices, which are falling amid reduced demand from importers who expect further declines in world prices.

According to the Safras and Mercado agencies, as of February 24, in Brazil, soybeans were harvested on 30.3% of the area, which is slightly lower than the annual average of 31.4%, and in the main producing state of Mato Grosso, 76% of crops were threshed.

Another local agency, AgRural, reports that on February 24 soybeans in the country were harvested on 33% of the area, compared to 43% on this date last year. Due to heavy rains during harvesting, the agency's experts lowered the soybean harvest forecast in Brazil in FY 2022/23 to 150.9 million tons.

Argentina's Agrarian Federation has called a strike for Tuesday to protest financial conditions for farmers, including taxes and the exchange rate. If it does not become massive, it will have almost no effect on quotations, but the experience of recent years shows that protests in the country often lead to a strong speculative jump in soybean prices.

March soybean futures in Chicago yesterday fell 2.9% to $547.7/t, losing 3.8% of the price for the week.

The reason for this was data from the NOPA association on the reduction of soybean processing volumes in the USA in January to 4.87 million tons, although traders predicted them at the level of 5.16 million tons.

According to the USDA, during the week of February 17-23, soybean exports from the United States decreased by 2.2 times to 691 thousand tons, while the EU increased soybean imports by 32% in the last week, and in total, since July 1, purchased 7.1 million tons of beans .

Amid falling soybean prices, March rapeseed futures on the Paris exchange yesterday fell 2.9% or €14.5/t to €528.25/t or $559.5/t (-5.5% for the week), while March canola futures on the Winnipeg exchange rose 0.7% to CAD 847.2/t or $622/t (+2.3% for the week).

In Ukraine, the export prices of demand for rape fell for a week by €10-20/t to €510-530/t on DAP - Germany, Poland and the Czech Republic, but in the port of Odesa they remained at the level of $450-470/t CRT.

Soybean demand prices on DAP - Romania, Poland and Hungary also fell to $460-500/t against the backdrop of lower prices for soybean oil and meal in the EU, but demand for soybeans remains high in Ukrainian ports, so processors are keeping purchase prices at the same level 17,000-19,000 hryvnias/t with delivery to the factory and they do not lower them.