Purchase prices for soybeans in Ukraine are beginning to fall

Regular missile attacks on the Ukrainian energy infrastructure by Russia, recognized as a sponsor of terrorism, but in fact a terrorist country, complicate the work of processing enterprises, which shortens their working hours.

Soybean processing is very unstable, especially given the low rate of export of processing products, mainly through the western borders. The shutdown reduces demand for soybeans and lowers prices. In addition, demand prices for soybeans from European buyers are also falling.

In Ukraine, purchase prices for soybeans with GMOs decreased by 500-1000 UAH/t to 12500-13500 UAH/t SRT plant depending on the region, while exporters in the French economy offer 12-13 thousand UAH/t for it.

Export demand prices for deliveries to Danube and Black Sea ports are $350-370/t, with delivery to Romania or Hungary – $450-480/t, but demand from the EU is decreasing.

The export of soybeans from Ukraine decreased by 51.5% to 58.3 thousand tons during the week, and the total for the season reached 725 thousand tons. The main buyers were Turkey and Romania, where soybeans were transshipped from Danube ports to large ships.

According to the Fediol Vegetable Oil and Meal Industry Association, EU countries processed only 716,000 tons of soybeans in October, which is the lowest October figure in the last 9 years. The import of soybeans in the 2022/23 MR decreased in comparison with the previous season by 15% to 3.976 million tons, as the import of sunflower grew from 0.15 to 1.07 million tons. Of the soybeans imported to the EU, 42.3% was supplied by Brazil, 39, 3% - the USA, 8.4% or 333.6 thousand tons - Ukraine.

January soybean futures on the Chicago Stock Exchange during November are trading at $525-530/t (+3-4% for the month), but the pressure on them in the near future will increase the completion of sowing in Brazil.

According to AgRural data, as of November 21 in Brazil, 80% of the planned area was sown with soybeans (86% last year), but this year the area sown will grow by 3-4%. The weather is favorable for planting, and work is almost complete in the central-western regions of the country, where most of the soybeans are grown.

The decision by Brazil's National Council on Energy Policy to maintain a 10% biodiesel blend until March 31, followed by an increase to 15% from April, will have a negative impact on demand. If the mandate is increased to 15%, the demand for soybeans for biodiesel production will increase to 30 million tons in 2023.

According to Oil World estimates, soybean oil stocks at factories in Argentina rose to a 29-month high of 423,000 tons as of Nov. 1, compared to 338,000 tons a month ago. Most importers are buying cheaper palm oil, so demand for soybeans has fallen sharply.

If the weather in South America remains favorable for the development of crops, then with the beginning of harvesting in January, the pressure on soybean quotations will increase, especially against the background of low prices for oil and palm oil.