W47 Soybean Update: Soybean Exports Surge in Ukraine, Brazilian Planting Faces Challenges, and Decline in Soybean Imports for Algeria and Egypt

Market & Price Trends
Publicado 30 de nov. de 2023
In W47 in the soybean landscape, Ukraine's soybean exports in November 2023 reached 425,000 mt, with a potential increase to 560,000 mt by month-end, driven by high demand and affordability compared to American and Brazilian soybeans. Meanwhile, Brazilian soybean planting faces challenges with hot and dry conditions in central and northeastern regions, potential lower yields, and forecasts of erratic weather. Algeria and Egypt reduced soybean imports due to currency issues, with notable declines from the US, and increased supplies from Canada.

Ukrainian Soybean Exports Surge in Nov-23

During the first 20 days of November 2023, Ukraine exported 425 thousand metric tons (mt) of soybeans, and if this pace continues, it could reach 560 thousand mt by the end of the month. The Ukrainian soybean market is witnessing high demand, with 500 thousand mt already contracted for December 2023, and sales extending into January and February 2024. The affordability of Ukrainian soybeans, priced at USD 40 to USD 50/mt cheaper than American and Brazilian soybeans, is a significant driver of purchases, particularly from the EU. This surge in soybean demand is contributing to rising prices in Europe for soybean meal, which has increased by USD 120/mt. Additionally, there is notable demand from Turkey.

Brazil's Soybean Planting Progress Hindered by Unfavorable Weather

As of late W46, Brazilian soybean planting reached 61.2%, lagging behind the previous year's 73.4%, with hot and dry conditions affecting east-central and northeastern Brazil and wet conditions slowing planting in the south. Hot and dry conditions in central Brazil are hampering soybean planting and development, leading to a need for replanting. Late-planted soybeans face the risk of lower yields even if weather conditions improve. Forecasts predict more erratic weather, posing a potential threat to Brazilian soybean production. Over the past 10 to 15 days, central and northeastern Brazil experienced only 20% of normal rainfall, with extreme temperatures adversely affecting the early soybean crop. Dry conditions are a concern in various regions, while wet conditions in southern Brazil also hinder soybean planting.

According to the National Supply Company (Conab), São Paulo is expected to produce 4.7 mmt of soybean in the 2023/24 season, indicating a 4.2% decrease compared to the previous cycle's 4.9 mmt. The total cultivated area in the state remains stable at 1.29 million hectares (ha), with an estimated oilseed productivity of 3.63 mt/ha. Planting progress is slower compared to the previous harvest, reaching around 50% at the time of the survey.

Soybean Planting in Paraná Advances to 93% of Projected Area Despite Slight Deterioration in Crop Conditions

Soybean planting in Paraná, Brazil, has reached 93% of the total projected area in the state, showing a 9% increase week-on-week (WoW), as reported by the Department of Rural Economy (Deral). Despite heavy rains on some days during the last period, the progress is 1% point ahead year-on-year (YoY) but slightly below the percentage recorded in 2021, which was 97%. However, there is a slight deterioration in crop conditions, with 87% of the area now classified as in good condition, compared to 88% the previous week and 93% at the same time in 2022, when the state achieved a record harvest.

Algeria and Egypt Experience Sharp Declines in Soybean Imports due to Currency Shortages

In 2023, Algeria and Egypt notably decreased their soybean imports from major producing countries due to a shortage of foreign currency and the depreciation of national currencies. Algeria is projected to purchase 1.2 mmt of soybeans for the entire year, reflecting a 200 thousand mt reduction compared to the previous year. Notably, supplies from the US fell the most, from 422 thousand mt to 201 thousand mt. Brazil reduced exports from 921 to 790 thousand mt. Conversely, Canada's oilseed supplies to Algeria nearly tripled, rising from 110 thousand mt to 293 thousand mt. For Egypt, soybean purchases decreased more significantly, dropping from 4 mmt to 1.5 mmt. Imports from the US experienced the largest decline, with soybean exports plummeting by 4.5 times to 769 thousand mt.

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