The successful conclusion of the harvest in the US and sowing in Brazil increases the pressure on soybean quotes

The basis of the global soybean balance for FY 2022/23 is the forecast of a record soybean harvest in Brazil, which can be hoped for by the successful completion of sowing. In addition, favorable weather in the U.S. during the soybean harvest reduced losses and improved production forecasts.

In the November report, Oil World experts forecast a surplus of global soybean production in 2022/23 in the amount of 13 million tons, as the world harvest will amount to 389.5 million tons (356.28 million tons in 2021/22), in particular in Brazil - 151 million t, while the USDA estimates the Brazilian harvest at 152 million tons, the CONAB agency at 153.5 million tons, and the Safras and Mercado agency increased its estimate by 3 million tons to 154.5 million tons.

Argentina plans to increase soybean production to 46.5 million tons in FY 2022/23 (43 million tons in FY 2021/22), however, the severe drought that persists in most regions of the country may reduce yields.

According to Crop Progress, 96% of soybeans have been harvested in the US, which is 5% ahead of the 5-year average. Oil World forecasts that the harvest will decline by 2.7% from the previous season to 118.3 million tonnes, while exports will be the lowest in three seasons at 52.5 million tonnes (USDA estimate of 55.66 million tonnes) amid strong competition from South American soybeans.

Exports of soybeans from the USA for the week of November 4-10 decreased by 40% to 1.858 million tons (of which 1.27 million tons were shipped to China), and in total for the season reached 14.69 million tons compared to 16.6 million tons last year .

January soybean futures on the Chicago Stock Exchange fell 0.6% to $529.3/t yesterday (+3.4% on the month), while they traded at $460/t a year ago.

In Ukraine, 3.4 million tons of soybeans were threshed from 1.4 million hectares or 91% of the area with a yield of 2.4 t/ha (2.68 t/ha in 2021), but the total yield will slightly exceed last year's 3.4 million tons Prolonged rainfall in September and October delayed harvesting and worsened the quality of soybeans. In November, a sharp increase in the volume of offers increased pressure on prices, especially given the uncertainty surrounding the further operation of Black Sea ports.

The decrease in processing capacity caused by unstable energy supply and a significant volume of offers led to a drop in purchase prices for GMO soybeans by UAH 500-1,000/t to UAH 12,000-14,500/t depending on the region.

Export demand prices are $350-410/t with delivery to ports and $450-480/t with delivery to Romania or Hungary.

The continued operation of Black Sea ports after November 19 will boost export demand and support procurement prices, but world prices will also gradually decline as Brazil's soybean harvest approaches, starting in January.