Soybean prices in Ukraine are falling under pressure from falling sunflower and rapeseed prices

Restrictions on sea exports from Ukraine remain in place, and shipping through Danube ports is associated with increased risks. Against this background, the cost of road and rail logistics to ports and buyers in the EU continues to rise as the supply of new crop sunflower, soybean and corn increases.

 

As of October 6, soybeans in Ukraine have already been harvested from 53% of the area, or 851 thousand hectares. 1.89 million tons of soybeans have been threshed with an average yield of 2.22 t/ha. Dry and warm weather is helping to accelerate the harvest, so soybean harvesting will continue to progress actively in the coming weeks.

 

Among the main oilseed crops, sunflower prices have fallen the most in recent months. Purchase prices fell to UAH 17,000–18,000/t delivered to the factory, compared to UAH 33,000–35,000/t in May–June.

Rapeseed prices in Ukraine decreased from 25,000–26,000 UAH/t to 19,000–20,000 UAH/t during the same period.

Such a sharp decline in the price of competitive oilseeds is also putting pressure on soybean prices in Ukraine.

 

Purchase prices for GMO soybeans in Ukraine have decreased from the maximum levels of last season of 21,000–21,500 UAH/t to 16,000–16,500 UAH/t with delivery to the factory.

Some support for the domestic market is currently provided by good demand for soybean meal from local feed producers.

Soybean prices in Ukraine are also supported by high demand from buyers in the EU, but the increase in logistics costs to Europe is gradually reducing the attractiveness of such supplies.

 

Export prices for GMO and non-GMO soybeans have practically equalized and are $420–440/t with delivery by railcars to the western border.

Asking prices with delivery to Odessa are about $385/t, or UAH 17,000–17,200/t, while soybeans are purchased at $400–410/t in Danube ports.

 

Soybean exports from Ukraine in September amounted to only 36 thousand tons. At the same time, exports of processed products reached 58 thousand tons of soybean meal and 22 thousand tons of soybean oil, which is equivalent to the processing of about 100 thousand tons of soybeans.

 

The sharp drop in sunflower prices is also driving down prices for sunflower meal, which competes with soybean meal in feed rations. This is putting pressure on soybean meal prices and could lead to a further reduction in domestic demand for soybeans.

 

Additional pressure on world soybean prices is being exerted by expectations of an increase in the US crop forecast ahead of the release of the USDA's October report.

November soybean futures in Chicago have decreased by 1.2% to $473.3/t over the past two days (-1.7% for the month).

Quotes are also under pressure from weaker export sales: over the past week they have decreased to 550 thousand tons, which is 40% less than a year earlier.

 

Favorable precipitation continues in South America, improving conditions for soybean planting and building moisture reserves.

Against the backdrop of high world prices, this could stimulate the expansion of sown areas in Brazil and Argentina. If weather conditions remain favorable until the end of the growing season, the countries could achieve new record soybean harvests, which would increase pressure on world prices in the second half of the season.

 

For the Ukrainian market, this means that with a further increase in the supply of the new crop, lower prices for sunflower and soybean meal, and high logistics costs, purchase prices for soybeans in Ukraine may continue to decline.