Soybean Prices in Ukraine Continue to Decline Due to Increased Supply from South America

The end of the soybean harvest in Brazil and Argentina, along with the increase in exports, continues to limit export demand for soybeans in Ukraine and the USA, leading to a decrease in prices.

 

Export demand prices for GMO soybeans continued to decline amid reduced purchasing activity by companies. Currently, prices are only around $410 per ton or 18,500-19,000 UAH per ton delivered to Danube ports. Purchases in Black Sea ports are practically non-existent as terminals are already preparing to receive new crops of rapeseed and barley. Exporters are also offering around $420-440 per ton for soybeans delivered to Poland and Romania, but transportation costs remain at around $60-80 per ton, making exports in this direction unfeasible.

 

Processors quickly reacted to the fall in export demand by reducing purchase prices for GMO soybeans by 500-1000 UAH per ton since the beginning of the month to 17,000-18,500 UAH per ton delivered to the plant. However, they continue to face difficulties with the sale of soybean meal and cake. Only the sustained demand for soybean oil, which has risen in price following sunflower oil, supports soybean prices.

 

Export demand prices for non-GMO soybeans also decreased to $450-460 per ton or 20,800-21,000 UAH per ton delivered to Danube ports. Additionally, there is a slight increase in demand for deliveries to the western border at prices around $450-465 per ton DAP Poland and Hungary.

 

In Ukraine, as of June 15, 2.03 million hectares of soybeans have been sown out of the forecasted 2 million hectares (1.8 million hectares in 2023). Although some analysts predicted an increase in sowing areas to 2.2-2.4 million hectares at the expense of corn areas, farmers sowed corn as much as last year.

 

In Brazil, the soybean harvest is complete, and yield forecasts remain at 147-152 million tons, though some local analysts are already raising their forecasts.

 

The Buenos Aires Grain Exchange reports that soybeans in Argentina have been harvested from 99% of the areas, with the yield forecast maintained at 50.5 million tons, slightly exceeding the June USDA estimate.

 

According to NASS, as of June 16, 93% of the planned soybean areas have been sown in the USA (97% last year and 91% on average over five years as of this date), with 93% germinated (95% last year). Over the week, the rating of crops in good and excellent condition decreased by 2% to 70% compared to 54% last year.

 

Since the beginning of the 2023/24 marketing year, as of June 13, US soybean exports total 40.88 million tons, which is 16.6% less than last year's pace, with a USDA forecast of 46.3 million tons. China's soybean imports in May amounted to 10.2 million tons, with 8.8 million tons coming from Brazil and only 1.27 million tons from the USA.

 

Yesterday, July soybean futures in Chicago fell by 1.7% to $424.5 per ton (-7% for the month), while November futures dropped by 1.4% to $410.3 per ton (-8.8%) amid favorable conditions for soybean planting in the USA.

 

The start of new rapeseed crop deliveries will increase the supply of rapeseed meal, further reducing the demand for soybean meal in the EU, exerting additional pressure on soybean prices in Ukraine, especially considering that new crop soybean quotations are 4% lower than the old crop.