Soybean prices rise in anticipation of the new harvest

The USDA's August bearish soybean balance increased pressure on quotes amid low export demand and reduced soybean processing volumes in the United States. Nevertheless, traders are following forecasts of the harvest of American soybeans, which in the next six months will be the main source of supplies to the world market.

In a new report, USDA experts increased their estimate of global initial and final soybean stocks in my 2021/22, although they lowered their forecast for world production (including for the United States) to 383.63 million tons compared to 363.26 million tons in my 2020/21.

The forecast for global soybean consumption was lowered by 2.5 million tons to 378.59 million tons, which will significantly exceed 366.1 million tons in the 2020/21 season, as a decrease in rapeseed and rapeseed production will increase demand for soybeans.

On the Chicago Stock Exchange, November soybean futures rose 2.8% to.506.3/ton after the report was released, while yesterday's crop report accelerated growth.

According to the USDA's NASS, the number of U.S. soybean crops in good or excellent condition decreased by 3% to 57% during the week (72% last year), and 94% completed flowering and 81% of crops formed pods, which corresponds to last year's level and the 5-year average.

Soybean exports from the United States for the week increased by 142% to a 6-week high of 277.6 thousand tons, which is still 70% lower than the corresponding indicator last year. Since the beginning of the season, 58.66 million tons have been exported, which is 42.4% higher than last year's pace. However, in the two weeks remaining until the end of the season, it is unlikely to be possible to reach the USDA forecast of 61.5 million tons.

According to the Association of processors NOPA, the volume of soybean processing in July fell to a 4-year low of 4.22 million tons, which was lower than traders expected, but soybean oil reserves increased by 5.1%.

In Ukraine, exporters offer нового 500/ton for new crop soybeans with GMOs at the port, and 6 600-620/ton for non – GMO soybeans with delivery to the port or border.

Processors buy soybeans of the old crop with GMOs at 17000-17500 UAH/ton and without GMOs at 19000-19500 UAH/ton with delivery to the plant, but there are almost no offers.

The current increase in soybean production in Ukraine will increase supply in the domestic market, but it is unlikely to lead to a significant drop in prices, as farmers will restrain sales in anticipation of high price levels, as it was last season.