Prices for soybean meal in Argentina fell below the Chicago exchange for the first time in two years
Export prices for soybean meal in Argentina fell below Chicago-based meal futures for the first time in two years amid weak demand and arrivals of the new soybean crop.
According to S&P Global Commodity Insights, Argentina is wrapping up its soybean harvest, with the FY2023/24 soybean crop expected to reach 50.5 million tonnes, nearly double the previous season's crop, which was hit by adverse weather conditions. Soybean processing will also increase by 40% to 40.5 million tonnes, peaking in June, further pressuring prices.
We will remind that Argentina is one of the world's largest exporters of soybean meal and oil. According to the forecast of S&P Global, in 2023/24 MR it will increase the export of soybean meal compared to the previous season by 50% to 28.5 million tons.
August meal futures on the SWOT in Chicago are currently trading at $383.5/t, while August delivery FOB Up River is offering $2/t cheaper. And the last time a discount of $5/t was observed on September 6, 2022, - reports the Platts agency.
After several months of higher prices than in neighboring Brazil, export demand in Argentina has eased somewhat, which has had a negative impact on the freight market.
Brazil boosts exports at slightly lower prices amid a devaluation of the local currency, as the Brazilian real fell 5.2% during the month from 5.2322 to 5.5023 reais per US dollar.
Brazilian soybean prices on a FOB Paranagua basis are also $2/t lower than Chicago, according to Platts. Such a discount in comparison with SWOT futures was recorded for the second time in June. Brazil completed its soybean harvest before Argentina, allowing it to accelerate shipments of soybeans and soybean meal to the world market, while Argentina is only now ramping up exports.
The recovery of the soybean harvest in Argentina had a positive effect on processing rates and prices. Last year, at this time, the FOB Up River spot base was +13 $/t.
Low soybean meal prices will increase pressure on feed crop prices in the near future, including barley and corn.
