Global
Global Soybean Markets (Mar 13)
A week of pressure in oilseed markets in W10, as Chicago soybean futures (May-23) were down 1% across the week, closing at USD 553.67/MT on Mar 17. The main reasons for pressure across the week were the ongoing Brazilian harvest and much of Argentina’s soybean drought damage already being priced in the week before (from the week commencing Feb 27). The Brazilian soybean harvest is now estimated at 48.9% complete, but this is back from 60.5% at the same point last year (Safras and Mercado). We are approaching the point where the origin will switch from the US to South America for global demand. Chicago soybeans were marginally supported last Wednesday (Mar 8), as the USDA’s cut to Argentina’s soybean crop was greater than expected in the March World Agricultural Supply & Demand Estimate. The USDA now estimates the crop at 33MT. While last week the Buenos Aires Grain Exchange, as expected, further revised their estimates to 29MT, down from 33.5MT previously estimated. Crop conditions (up until Mar 9) continue to deteriorate, with 71% of the crop now rated “poor/very poor”, up from 67% the previous week. Further cuts to Argentina’s soybean crop were also forecast by Rosario Grain Exchange.
March 2023/2024 Global Soybean Production Forecast Decline (Mar 16)
Combined with the prospect of a significant reduction in processing in Argentina, the forecast for total consumption was reduced by 4M MT and inventories also fell MoM. Trade remained unchanged MoM and was approx. 7% higher YoY Initial outlook for the 2023/24 season points to a larger global harvest, with expected increases in consumption, inventory, and trade. With a moderate increase in demand, inventories will shrink. Based on deliveries to China, Argentina, and many other suppliers, solid growth in trade is projected (+7%). IGC predicts that global production in the 2023/24 season will increase by 29M MT YoY, due to the increase in acreage and higher yields. Faced with the increased use of soy products in the feed, food, and industrial sectors, demand is high, with likely stockpiling. Trade is expected to reach a record 173M MT (+4%).
World Will Harvest More Soybeans in 2023/24 (Mar 17)
The International Grains Council (IGC) released on Mar 16 its first estimate for the global harvest in 2023/24. The agency projects a harvest of 2.283B MT of grain, a volume greater than that of 2022/23, which reached 2.25 B MT, calculates the agency. For soybean, with increases in area and productivity, the global soybean harvest will total 399M MT, says the IGC, a volume greater than the 370M MT of the 2022/23 harvest. Ending stocks, in turn, should grow by 10M MT, to 56M MT. Demand should be 1.17M MT, slightly below the 1.18M MT forecast in February. Thus, the stock estimate fell from 49M MT to 46M MT.
Global Projections for the Soybean Season in 2022/23 (Mar 17)
In relation to the February report, the volume of global soybean production fell again, largely due to the losses and low yields that the Argentine campaign is having. World soybean production for the 2022/23 campaign is expected to increase by 4.7% compared to the previous cycle, from 358.1M MT to 375.1M MT. Estimates for production in South America show an increase of 18.1% for Brazil, which should reach 153M MT, while a drop of 24.8% is projected for Argentina, with 33.0M MT. Paraguay is expected to increase its production by 139.1% compared to the 2021/22 campaign (4.2M MT), reaching a production of 10M MT, which would mean a return to the usual levels prior to 2020/21. In this new report, production of 116.4M MT is projected for the United States, which represents a drop of 4.2% compared to the 2021/22 cycle, when 121.5M MT was reached. The export activity would be led by Brazil with 92.7M MT, growing 17.2% in relation to the previous cycle (79.1M MT), while the United States would reach an export volume of 54.8M MT, a number that represents a drop of 6.6% compared to last year (58.7M MT). For Argentina, forecast exports are 3.4M MT, which would mean an increase of 18.8% compared to the 2021/22 campaign (2.9M MT). China should import 96M MT, growing 4.8% compared to the 2021/22 cycle (91.6M MT). Ending stocks of the oilseed would increase by 1.0% globally, reaching 100.0M MT. However, for the United States, Argentina, and the European Union, stocks would fall by 23.4%, 17.2%, and 7.4% respectively, while for Brazil and China, they would increase by 17.3% and 9.2%, respectively.
Brazil
Soybean Prices Continue to Fall, but Derivatives Rise in Brazil (Mar 13)
According to data released on Mar 13 by the Center for Advanced Studies in Applied Economics (Cepea – Esalq/USP), even with falling soybean prices, bran, and soybean oil prices Soybeans rose again in the domestic market. According to Cepea researchers, the appreciation of derivatives is linked to lower supply in Argentina, the main global supplier of soy derivatives, and to expectations of greater demand, especially from abroad for Brazilian derivatives. Soybean production in Argentina was projected this month by the USDA at 33M MT, the lowest since 2008/09. This retraction is due to high temperatures and the water deficit in a large part of the development of the 2022/23 crops.
Porto Murtinho, in Mato Grosso Do Sul, Should Break the Handling Soybean Record in 2023 (Mar 13)
Exports of products through the Porto Murtinho port terminal in Mato Grosso do Sul, should break a record this year surpassing 700K MT, driven mainly by soy according to the State Secretariat for the Environment, Development, Science, Innovation and Technology (Semadesc). In the first two months, soybean exports via the waterway that has Porto Murtinho as its final destination reached 122.4K MT. “In addition, the equivalent of 675K MT is already contracted by the end of the year”, says Semadesc, in the note, and last year, more than 300K MT of soy and sugar were moved in Porto Murtinho.
Brazil’s Soy Export Pace Dropped 9.2% In March (Mar 13)
Soybean exports from Brazil until the second week of March reached 502.9K MT a day, down 9.2% from the daily average recorded in the same full month of 2022, according to data from the government released on Mar 13, at the height of the oleaginous harvest. Harvest work for the 2022/23 cycle is delayed in some producing states, compared to the past harvest, which contributes to reducing the volume of soybeans available for shipment. The country is the largest global producer and exporter of grain.
Brazil in 2023 May Export a Record Amount of Soybeans (Mar 13)
According to ANEC forecasts, Brazil can export a record 93M MT of soybeans in 2023, which is 20% higher than the result of the previous year. It is noted that the main buyer of Brazilian oilseeds is China (71% of total current exports). Shipments were also made to Spain (7%), Thailand (3%), Russia (3%), and Argentina (2%).
Soy Completely Stopped in the Midwest (Mar 13)
The soy market in the state of Mato Grosso do Sul had a day without changes, with business also stopped, according to information released by TF Agroeconomia. “Market remains sluggish after the outflow of very expressive volumes at the beginning of W11. Trading volumes surpassed 50K MT, which is not extraordinary for better contexts, but it is way off the curve for this moment of market apathy”, he comments. “Complete absence of variations in Dourados, prices were quoted at USD 29.41 (R$ 154.00), in Maracaju at USD 29.22 (R$ 153.00), in Sidrolândia at USD 29.03 (R$ 152.00), in Campo Grande at USD 29.41 (R$ 154.00) and in Chapadão do Sul at USD 28.83 (R$ 151.00)”, completes the consultancy.
Soybean Trading Pace Improves but Remains Below Average in Brazil (Mar 13)
The soybean business pace for the 2022/23 Brazilian crop registered some improvement in February and the first days of March. Even so, the percentage sold remains well below the five-year average for this period of the year. The arrival of the new crop has encouraged growers to speed up sales, but the negative pressure from the record volume being reaped has prevented an even better pace. The fact is that, due to the need to sell production, growers will have to keep selling even in an environment of weaker prices in the coming few weeks. According to a survey carried out by SAFRAS & Mercado, with data collected through March 3, 35.4% of Brazil’s 2022/23 soybean crops were sold, with an increase of 4.9% from the percentage of the previous month (30.5%). The current percentage is equivalent to approximately 53.924M MT traded, out of a crop currently estimated at 152.425M MT. In the same period of the previous year, the percentage was 48.5%, while the five-year average for the period is 51.7%. For the new Brazilian soybean crop (2023/24), the data are still very preliminary, but already indicate a theoretical percentage sold off of 1.6% of a still hypothetical production (based on the 2022/23 crop). For the current calculation, the figures of the 2022/23 crop were used as the first estimate by SAFRAS & Mercado for the new crop (2023/24) and will be released in July, in its traditional planting intention report.
Conab Experts Lowered the Forecast for the Soybean Crop in Brazil (Mar 13)
In the March report, Conab analysts lowered the forecast for soybean production in Brazil in 2022/23 MY by 1.5M MT compared to the estimate a month earlier to 151.4M MT, which is planned to be harvested from 43.5M ha from 41.5M ha of the previous season which resulted in 125.5M MT. The export forecast is lowered by 0.9M MT per month to 93M MT which is still a record figure. Domestic oil consumption is expected to be 56.6M MT, ending stocks at 5.5M MT.
Soybean Harvest Passes Halfway in Brazil With a Lull in the Rains (Mar 13)
The harvest of the 2022/23 soybean crop reached 53% of the cultivated area in Brazil on Mar 9, against 43% a week earlier and 64% in the same period last year, according to data from AgRural. With less frequent rains and higher temperatures, the workers were able to advance at a better pace. In Rio Grande do Sul, the first harvested areas confirm the crop failure, with yields up to 60% lower than initially expected.
Brazilian Soybean Harvest Is Not Yet Completely Defined, but Premiums Continue to Drop Sharply (Mar 14)
Pátria Agribusiness brought its new estimate for the 2022/23 Brazilian soybean harvest at 148.96M MT on Mar 14. The average productivity expected by the consultancy was 56.9 bags per hectare (3.413 kg/ha), 12.8% more than in the previous season. In addition to higher yields, Brazil also increased its area dedicated to oilseeds by 5.2%, to 43.65M ha. Among the numbers detailed by Patria, one of the highlights is the production of soy in the northern region of the country, where an increase of 12.1% is estimated in relation to the past harvest. The region, which has the largest harvest in Tocantins, should register a harvest of 9.4M MT. Although positive news seems more frequent now, the harvest in Brazil is still coming to an end and the problems are still worrying, especially due to excessive rainfall, which is not the best scenario for crops in the final stage of development. Logistics continues to be one of the main bottlenecks and points of concern, as well as a vector of pressure on quotations in the domestic market. Premiums continue to decline significantly in Brazil and also require constant monitoring, to at least ensure a good share of their sales at more opportune times. The months of March, April, and May already register quite negative premiums, and continue to fall and are one of the main points of attention for Brazilian producers, as explained by market analyst Mário Mariano, commercial director of Novo Rumo and Agrosoya.
Mato Grosso Sells 5% Of Soy Expected for 2023/24 (Mar 14)
Soy sales in Mato Grosso reached 4.92% of the expected production for the next 2023/24 crop, which will be planted from September, a monthly increase of 2.08 points, but behind the pace of previous years, said the Mato Grosso Institute of Agricultural Economics (Imea) on Mar 13. Farmers in the state started selling 2023/24 corn, with 1.78% of the expected harvest already negotiated, but also with a delay. In the same period of the previous cycle, 16.28% of soybeans and 6.51% of corn were sold. The historical average for this time of year for the anticipated commercialization of oilseeds and cereals is 12.49% and 6.87%, respectively. For the current harvest, 2022/23, IMEA reported that soybean sales reached 52.26% of production, a growth of 7.11 points in the monthly variation, and also with a delay over recent years.
More Declines for Soybeans in the South (Mar 14)
The soy market in the state of Rio Grande do Sul started W11 with general drops of up to USD 0.48/sack (R$ 2.50), and business remained at a standstill, according to information released by TF Agroeconomia. “The long queues in Paranaguá are causing some trading companies to turn over ships that were originally going to go there, to the Rio Grande”, he comments. “As a result, two events occur: a) More soy deals end up in PR and MS, destined for the Rio Grande. b) Traders try to buy some position of old soybeans in RS, pushing prices to levels that don't make sense for a normal export account. But the account becomes the local price x eventual demurrage”, he adds. Santa Catarina marked a drop of USD 0.38/sack (R$ 2.00) in the port, without further business. “Prices continue to mark consecutive declines while pressured by increasing supply and falling premiums. In this period of lower prices, few deals are made further south. In the port of São Francisco do Sul, the price was USD 31.98 (R$ 167.50) for March.
Brazil Farmers Harvest 53% Of Soybean-Planted Area (Mar 14)
Brazilian farmers have harvested 53% of the soybean area planted for 2022/23 through Mar 9, agribusiness consultancy AgRural said on Mar 13, up 10% points from the previous week. At the same time last year, 64% of the Brazilian soy fields had been reaped, said AgRural. In Brazil’s southernmost state of Rio Grande do Sul, the first harvested areas confirm crop failure due to a severe drought, with yields up to 60% lower than initially expected, according to the consultancy.
Drought and Excessive Rainfall Affect Soybean Crops in Brazil (Mar 14)
Harvesting of the soybean crop is underway across the country and presents challenges in different regions. According to the National Supply Company (Conab), about 5% of the total soy area in Mato Grosso is still awaiting harvest, while in Goiás the rain-delayed operations for a few days, but have already been resumed. In Mato Grosso do Sul, the last week was characterized by more stable weather, allowing for greater progress in the harvest. In Paraná, however, frequent rains are harming the pace of harvesting and favoring the incidence of end-of-cycle diseases. In Santa Catarina, the vast majority of crops are in good condition, with only a few occasional records of powdery mildew and rust, but without significant damage. However, in Rio Grande do Sul, even with the recent rains, most crops show consolidated losses due to the drought, and the crops in better conditions are concentrated in the northeast of the state.
Large Crop in Brazil Will Prevent China From Suffering Greater Impacts From Argentina (Mar 15)
Brazil will increase soybean processing in 2023 as a result of higher demand for chaff and oil amid crop failure in Argentina, but with a record Brazilian harvest there will be enough supply to boost grain exports to China, said the president of Abiove, the association of companies in the sector. According to André Nassar, this confirmation that Brazil is a reliable supplier of soybeans to China, the largest global importer of the commodity, will be an important moment in the trip of president Luiz Inácio Lula da Silva and his entourage to the Asian country, at the end of the month, in a mission that should mark the strengthening of trade ties with the Chinese.
Old and New Markets in the Sights of Brazilian Free Soy Producers (Mar 15)
Brazil currently produces almost 1M ha of non-transgenic soy, that is, that which is not genetically modified and also called free soy. Even so, it is soy with high technology embedded in its seeds and which has a large world market to conquer. Brazilian free soy is sold mainly to Europe. There, consumers demand from retail chains products with a non-GMO seal, such as for example, eggs, milk, and a large part of the chicken sold on supermarket shelves. You might wonder what these products have to do with soy. Now, the animals are fed with feed that has conventional soy as an ingredient. However, they are stamps that attest to the origin of soy, but this is not the law in most European countries. Norway is the only nation that legally requires the entry of only non-transgenic soy. There, the salmon industry consumes conventional grain in the form of Soy Protein Concentrate (SPC).
SAFRAS Increases Brazilian Soybean Exports to 94M MT in 2023 (Mar 15)
Brazil must export more soybeans, meals, and oil in 2023, as a way to compensate for the absence of a large part of the Argentine production losses, induced by the unfavorable climate. The country must gain international market share in the exports of soybeans, meat, and oil, which also boosts the crush. Despite demand growth, the super crop must lead to an increase in stocks compared to 2022. Brazilian soybean exports must total 94M MT in 2023, above the 78.7M MT indicated for 2022. The forecast is part of the Brazilian supply and demand projection, released by SAFRAS & Mercado, and indicates an increase of 19% between one season and another. In the previous forecast, in January, the number was 93M MT. SAFRAS indicates a crush at 53M MT in 2023 and 50.07M MT in 2022, with an increase of 6% between one season and another. In January, the estimate was 52M MT. SAFRAS indicates imports of 100K MT for 2023, down 76% from 2022. As for the 2023 season, the total supply of soybeans must increase by 15%, rising to 156.378M MT. Total demand is projected by SAFRAS at 150.5M MT, growing 14% over the previous year. Thus, ending stocks must rise 53%, from 3.850M MT to 5.878M MT.
Rio Grande Do Sul Starts Soybean Harvest With Delay (Mar 16)
The Rio Grande do Sul soybean harvest reached 1% of the cultivated area in the 2022/23 season, behind the 10% recorded a year earlier and the historical average of 14% for the period, after episodes of drought in the State, showed data from Emater-RS. The beginning of the harvest made it possible to observe with greater accuracy the level of productivity losses caused by the drought in oilseed crops, said the technical assistance and rural extension company linked to the state government. In addition, weather conditions remain adverse and unstable. "The irregularity and poor distribution of rains were repeated again in the period between Mar 6 and Mar 12, reinforcing the great variability of the productive potential within a region and between the producing regions of the State", he said in a report. Soybean crops are predominantly in the grain-filling phase, with 54% of the areas.
Brazil FOB Soybean Prices Drop to Near 14-Month Low (Mar 16)
Brazilian FOB soybean outright prices have fallen below the USD 550/MT mark to a nearly 14-month low amid a record crop and faltering spot demand on both the export and domestic front, with subsequent pressure over cash premiums. The SOYBEX FOB Santos price for April dates was assessed at USD 548.33/MT Mar 13, the lowest for front-month loading cargoes since Jan. 24, 2022, showed data from S&P Global Commodity Insights. The basis for the same period was at plus 1 cent/bushel to the Chicago Board of Trade May (K) contract, a level not seen since mid-June 2021. Participants attributed the bearish situation mainly to the historically large Brazilian soybean crop. Despite some rain-led harvest delays in the past weeks, the country remains on track to produce a record-breaking 153M MT of the oilseed, up 18% on the year, according to the US Department of Agriculture’s latest estimate.
US-China Tension and Commodity Supply Favor Demands From Brazil With Chinese (Mar 17)
President Luiz Inácio de Lula da Silva's trip to China, between March 26 and 31, will encounter a global geopolitical situation favorable to closer trade relations with Brazil, amid tensions between Chinese and Americans being accentuated by Beijing's rapprochement with Russia. If the situation recalls how Brazilian exports benefited from the China-US trade war in the past, it also coincides with a year of record harvest of Brazilian soybeans, the main product in the national export basket that can serve the Chinese, the world's largest importers, with certain off, if there is any more serious feud between them and Americans. “In soybeans, there is an expectation of a record production of 150M MT due to the increase in quantity, this should prevent prices from rising,” said the president of the Brazilian Foreign Trade Association (AEB).
Rains Affect Soybean Harvest and Cotton Sowing in Brazil (Mar 17)
At the beginning of the week, the rains persisted in the Center-North, compromising the soybean harvest in areas of Maranhão, Piauí, and Bahia, in addition to delaying cotton sowing operations. The same problem is faced by the main producing regions of the Midwest, where soy is still in the field. The reason for the strong rainfall activity is related to the humidity corridors present in the North and Northeast regions of Brazil. Although the rains may come in the form of isolated and transient showers in other areas, in the center-north they remain high and persistent. Meanwhile, the dry air mass continues to act between the Center-South of Bahia and Minas Gerais, keeping temperatures high and humidity levels low. This further aggravates the water conditions of the main crops in the region. Rural producers are aware of the challenges posed by the climate and are looking for alternatives to minimize impacts on production.
Brazilian Conventional Soy May Reach Japan (Mar 17)
In up to ten years, Brazilian production of conventional soy could serve Japanese consumers. The study “Data Survey on the Structural Strengthening of World Food Security”, carried out by the consortium Nippon Koei Lac and Japan International Cooperation Agency (JICA), showed that the demand could be 230K MT of GM-free soybeans in 60K hectares for human consumption in Japan. The Japanese demand for free soy was presented last week through a survey that surveyed the production chain in Brazil. There were 29 questionnaires applied to rural producers, trading companies, and industries in Brazil and Japan. 100% of the soybeans used for oil and 78% of the soybeans used for food in Japan are imported, with 80% coming from the United States, 14% from Brazil, and 8% from Canada. Data from the Ministry of Agriculture, Forestry and Fisheries of Japan, presented in the survey, show that the market is 3.6M MT.
Grain Exports From Brazil Should Accelerate With Less Rain in the Center-South (Mar 17)
Soybean exports are expected to pick up the pace in W12, with less rain expected compared to the first half of March, when shipments from important ports in central-south Brazil had to be routinely interrupted due to rainfall, according to information from a meteorologist and from the port of Paranaguá (PR). The port of Paraná, for example, suffered from above-average rainfall this month. In 16 days in March, adding up the accumulated hours with interruptions in shipments due to rainy weather, Paranaguá lost the equivalent of almost seven days, according to the port administration. For next week, the climate scenario should be different, including for the port of Santos, the main port in the country for soy and corn.
Chaos on the BR-277 Could Generate a Loss of USD 113.24M in the Flow of Soybeans From Paraná (Mar 18)
The chaos on Paraná's roads, especially on the Curitiba-Paranaguá connection via BR-277, has the potential to cause billionaire damage to state agribusiness. Considering only soy logistics (without involving other production chains), the extra expense, if the shipment has to be made through the Port of Santos (SP), can exceed USD 113.24M (R$ 600M), according to a calculation by the Technical and Economic Department (DTE) of the Faep/Senar-PR System. In recent months, on several occasions, BR-277 has been blocked in whole or in part due to falling barriers, cracks in the road, and the risk of landslides. Based on this, the projection takes into account the scenario of total interruption of the BR-277, the only road that carries heavy cargo traffic to the Port of Paranaguá. In this case, production would have to leave through another port complex.
United States
Plant More Soybeans or Corn? (Mar 13)
Corn appears to have a slight advantage over soybeans based on recent prices and USDA cost estimates made in December. This is not a huge difference, but projected profits are an important factor influencing whether growers plant more or less of any given crop. The long-term average for the ratio is around 2.36 to 1. It is currently around 2.33 to 1, indicating a slight in favor of corn. A year ago, the comparison yielded around 2.45 to 1, in favor of soybeans. Historically, the USDA is more likely to change its estimate for soybeans than corn when updating its forecasts. But typically the change for both crops is about 1M acres up or down. Over the past 20 years, the US government has increased its corn hunch eight times, decreased it five times, and held the number steady seven times. But for soybeans, the cultivated area fell only four times and increased 14 times, remaining the same only twice. So, from a dice roll perspective, soybeans seem more likely to gain ground than corn. Corn's profit advantage and future soybean-to-corn ratio could change that math, gaining more area than soybeans from early November estimates.
Soy Drops 1% In Chicago Stock Exchange (Mar 13)
On the Chicago Stock Exchange, the soybean market deepened its decline and started to operate with double-digit losses among the main maturities, ending the day with losses of 13 to 17.25 points, leading the market once again to lose the level of USD 15.00/bushel. May futures ended the day at USD 14.91 and July at USD 14.79. Soybean meal and oil futures ended this week's first trading session losing more than 1%.
Soybeans Lower on Fund and Technical Selling (Mar 13)
Soybeans were lower on fund and technical selling. Conditions in Brazil mostly look good and a recent drier weather pattern has helped push harvest past 50%. Conversely, Argentina’s crop remains in very poor shape, with the potential for further production projection reductions in the coming weeks. There’s some expectation that record crops in Brazil won’t be enough to fully make up for those losses in Argentina, which could exacerbate what could be a tight global vegetable oils situation in the second half of the year. There was also spillover from soybean products and crude oil, which all also saw liquidation. Soybean export inspections were below a year ago but remain ahead of the pace needed to meet USDA projections for the current marketing year. Last week’s top destinations were Mexico and Germany. The 2022/23 marketing year is just over the halfway point. The USDA’s next round of supply and demand estimates is out on April 11th.
Soybean Inspections in the US Stay Ahead of Needed Paces (Mar 13)
The USDA says soybean export inspections continue to run ahead of what’s needed to meet projections for the current marketing year. Soybeans were pegged at 618.80K MT, 66.42K MT more than in W10, but 179.89K less than last year. The top destinations were Mexico and Germany. So far, this marketing year, soybean inspections are 43.33M MT, compared to 4.279M MT a year ago.
Chicago Closing Prices for Grains (Mar 13)
Soybeans closed the week on mixed ground. Brazil's Conab lowered its soybean production outlook by 1.4M MT to 151.42M MT in its monthly update, contributing to gains from the closed position and some buying. However, the bulk of the deferred positions close with losses while the Brazilian soybean harvest has already advanced over 94.83% of the area of Mato Grosso, the main soybean-producing state in Brazil, which leads to falls due to the pressure itself of the offer. China's state-controlled grain company Sinograin was buying and storing soybeans harvested in the Asian giant, hoping the purchases will boost domestic prices and encourage more plantings by 2023.
USDA Lowers 2022/23 US Stocks and Argentine Soybean Crop Forecasts (Mar 16)
The March report by the United States Department of Agriculture (USDA) did not bring major surprises to the market, with little impact on Chicago. USDA brought negative adjustments to US stocks and the Argentine crop, confirming the bias expected by market players. USDA indicated that the US soybean crop is expected to hit 4.276B bushels in 2022/23, equivalent to 116.38M MT. The yield was indicated at 49.5 bushels per acre, in line with the February indications. US ending stocks are now projected at 210M bushels or 5.72M MT, up from 225M bushels in February, 6.13M MT. The market was betting on carryover stocks of 219M. USDA indicated the crush at 2.22B bushels (60.42M MT), down from February’s estimate of 2.23 B. The estimate for exports was raised to 2.015B bushels (54.84M MT). With regard to the global picture, USDA now projects the world soybean production in 2022/23 at 375.15M MT.
Soybean Export Sales up in W11 (Mar 16)
Soybeans were pegged at 665K MT (24.4M bushels), a big increase in W11 and from the four-week average. China picked up 208.1K MT and Germany purchased 121.5K MT. So far, this marketing year, soybean exports are 1.813B bushels, compared to 1.97B last year. Sales for 2023/24 deliveries were 66.1K MT to unknown destinations (66K MT) and South Korea (100MT). Soybean meal came out at 220.1K MT, 31% less than the previous week, but 6% more than the four-week average. The Philippines bought 44.1K MT and the Dominican Republic picked up 39.1K MT. At this point in the marketing year, soybean meal exports are 8,265M MT, compared to 8.792M MT a year ago. Sales of 35K MT for 2023/24 delivery were to Ireland. Soybean oil was reported at 3.9K MT, 47% below the week before and 3% from the four-week average. Mexico purchased 2.5K MT. Cumulative soybean oil exports are 63.2K MT, compared to 604.4K MT last year.
US Soybeans Able to Close Mixed (Mar 16)
Soybeans were mixed on spread trade and oversold signals. Beans were down for most of the session on uncertainties in the broader market and the lower trend in bean meals. There’s also been pressure from Brazil’s advancing record harvest. On the bull side of things, beans are due for a bounce on a technical basis, crush margins are good, and domestic demand is solid. Additionally, it looks like the record crop in Brazil might not be enough to make up for the losses in Argentina. Argentina’s crush facilities are reportedly at their lowest operating capacity ever because of tight supplies tied to the ongoing drought. Argentina is typically the world’s largest exporter of soybean products.
USDA Reports Weekly US Soybean Sales Within Market Expectations (Mar 16)
The new weekly US export sales bulletin from the USDA (United States Department of Agriculture) reported on Mar 16 arrived with figures within market expectations for soybeans, derivatives, and corn. For the week ending Mar 9, US 2022/23 soybean sales were 665K MT, with China as the top destination. The market expected something between 50K MT and 700K MT. In every season, the total oilseed already compromised by the country reaches 49.334M MT out of a total estimated by the USDA of 54.84M. The amount, however, is 8% less than that recorded in the same period last year.
US Soybean Export (Mar 16)
Brazilian soybean exports in March are expected to reach new records, but there may be some snags. Ships have faced queues at Brazil's second largest port, Paranaguá (PR), due to traffic disruptions and bad weather, something port authorities denied on Mar 15. However, last week's surge in US soybean sales could validate the Brazilian lag story, as demand for US grains generally declines as Brazil's season picks up. US weekly net sales through March 9 totaled 665K MT swt, the highest since January and following a net cancellation the previous week. But the huge volumes of Brazilian soybeans expected to arrive in the coming months could make China less interested in US beans next year. US new crop sales to China totaled 722K MT swt last week, not too unusual compared to other recent years, but are down 90% and 70% respectively from the same dates in 2022 and 2021.
Soybeans Closed Close to Stability on the Chicago Stock Exchange (Mar 17)
Divided between macroeconomic and demand fundamentals, soybeans closed close to stability on the Chicago Stock Exchange. Lots for May were up 0.15% to trade at USD 14.915/bushel. Already the contracts for July advanced 0.10% to USD 14.76/bushel. João Pedro Lopes, the market intelligence analyst at StoneX, says that the troubled financial moment in the US has been acting as a pressure factor on quotations. But by mid-day, US sales data supported prices. US soybean net sales reached 665K MT swt for the week ended March 9. A week earlier, the balance was negative, of 23.2K MT, according to the US Department of Agriculture (USDA).
American Students Sequenced the Genome of a New Soybean Pest (Mar 17)
Usually, the cost of genome sequencing is measured in millions of dollars, so not all pests are studied so thoroughly. However, controlling the soybean weevil turned out to be very difficult, and in order to find new methods of controlling the pest, it was necessary to study it better. This task was completed by students of the University of Minnesota, spending 1 semester of time. They found about 200K nucleotide bases in the soybean weevil genome, which is less than 10% of human DNA. Given that the pest is spreading rapidly through the Midwest, their work should be an important advance in keeping crops in the fields.
Soybeans Have a Week Marked by Risk Aversion in Chicago and a Sharp Drop in Premiums in Brazil (Mar 17)
W11 was very difficult for the soybean market on the Chicago Stock Exchange, in a movement that followed the other commodities, due to the pressure and the countless uncertainties that came from the financial market since last weekend. Risk aversion remained very present among businesses in international markets, reinforcing the weight of the crisis of confidence that took hold following the latest events in the US banking system and which was contaminating the most diverse sectors in the sequence. With all this, soybean futures on the CBOT ended the week with accumulated losses of more than 2% among the most traded contracts. The May maturity, an important reference for the current crop in Brazil, registered a loss of 2.06%, going from USD 15.07 on Mar 10 to USD 14.76/bushel. In July it went from USD 14.94 to USD 14.60, in the same period, accumulating a fall of 2.3%.
Paraguay
Soybean Shipments Show Signs of Recovery (Mar 15)
Lic. Sonia Tomassone, Capeco's Foreign Trade advisor, explained that in the second month of the year, there was a dizzying outflow of new harvest soybeans since practically in one month more than 600K MT were evicted. This scenario revitalized the entire logistics chain, both river, and land, and generated an important domino effect in other sectors of the economy, as well as a lot of work for the fields, she highlighted. Although the soybean harvest is still delayed for climatic reasons, good production is expected. In the first two months of the year, 607.93K MT of soybeans were removed, an increase of 14.67K MT (2.5%) compared to the same period in 2022, when 593.25K MT were exported. Between January and February 2023, soybean exports injected USD 273M into the national economy, that is, USD 65M more (31.2%) than the first two months of 2022, when shipments generated USD 208M, according to data from the Central Bank of Paraguay (BCP) taken by Capeco.
Argentina
USDA Slashes Argentina Crop Production (Mar 13)
Hot and dry conditions during February and early March continued to take a toll on soybean production in Argentina. In their March World Agricultural Supply and Demand Estimate (WASDE), the USDA significantly reduced the estimates for the 2022/23 soybean production in Argentina. The 2022/23 soybean production in Argentina is now estimated at 33.0M MT which is down 8M MT from the 41.0M MT estimated in February. The 2021/22 soybean production in Argentina was 43.9M MT. Argentina is the world's largest soybean meal and soybean oil exporter, and soybean crushers report that they cannot source enough soybeans to keep their operations functioning properly. Therefore, they have already imported significant amounts of Brazilian soybeans with more imports expected in the coming months. They have also bought back some of their contracts for meal and oil due to a lack of available soybeans to crush.
Drought Costs Top USD 14B for Soybean, Corn, and Wheat Growers (Mar 13)
The drought caused the forecast for soybean, wheat, and corn harvests to fall by 50M MT. Even with the higher prices, the loss of net income from the producing sector already amounts to USD14.140B, and the impact on the economy reaches 3 points of GDP according to a report from the Rosario Stock Exchange. If we add to this the impact of lower demand for freight, labor, and financial services, among others, the total losses for national economic activity amount to USD 19B. Regarding the net exports of the wheat, soybean, and corn complexes, that is, including shipments of oils, flour, biodiesel, and other products obtained from the processing of grains, the projection of foreign exchange income for the 2022/23 campaign falls to USD 21.74M, USD 13.95M below the previous 2021/22 campaign and USD 14.24M behind what was projected at the time of planting, in September 2022.
Soybean Prices Continue to Fall, Despite Lower Crop Forecasts in Argentina and Brazil (Mar 14)
Despite lower crop forecasts in Argentina and Brazil, soybean prices continued to fall under the pressure of a difficult situation in the US banking system. Traders believe the bankruptcy of two major banks involved in cryptocurrency could sharply lower fuel and food prices. In a March report, experts from the Brazilian agency Conab reduced, compared to February estimates, the forecast of soybean production in Brazil in 2022/23 MR by 1.5M MT to 151.4M MT, which is planned to be harvested from 43.5M ha. According to AgRural, soybeans in Brazil are now 53% harvested, down 11% from last year's above-average rates due to dry weather.
Drought Losses in Argentina Go Far Beyond Field Damage, Soybeans With the Worst Crop in History (Mar 14)
Losses are in the billions, the soybean harvest is expected to be below 30M MT and the government is still not taking a position on a possible reduction in retentions or effective aid to Argentine producers. Without a new round of 'soy dollar', business is stagnant in the country. The worst grain harvest in the history of Argentina is the summary made by the director of Globaltecnos, Sebastian Gavaldaon Mar 14. The subsequent episodes of adverse weather of all kinds, especially with heat waves and months of terrible drought, were the "perfect" composition for the scenario to be designed in this way. Estimated losses are billions, since not only was it lost in the field, but production costs were, on average, about 50% higher in the annual comparison.
Argentina No Longer Among the Top 3 Exporters of Soybean (Mar 15)
The country's yield forecast has again been sharply reduced, thus also depressing consumption and export estimates. In its latest report for 2022/23, the US Department of Agriculture USDA expects a global soybean harvest of 375M MT. That would be almost 8M MT less than expected in the previous month, but 17M MT more than 2021/22. The reduction in the estimate compared to February is mainly due to the drastically reduced forecast for Argentine production. The country has been struggling with the persistent drought and heat for several weeks, which further reduces the yield prospects. In Argentina, for example, only around 33M MT of soybeans are likely to be harvested, 8M MT or almost a fifth less than expected in February. For other important producing countries such as Brazil, the USA, or India, the Ministry is sticking to the forecast from the previous month. Globally, around 168.4M MT of soybeans are likely to be shipped across the world's oceans in 2022/23. The USDA has thus corrected its forecast for the previous month by almost 1M MT. In the previous marketing year, on the other hand, almost 154M MT were shipped. The plus compared to the previous month is based in particular on the expected larger exports from Brazil. As a result of the significantly larger harvest, Brazil should export around 92.7M MT. The USA should ship around 54.8M MT in 2022/23. Argentina is likely to lose third place among exporters with 4.3M MT and be supplanted by Paraguay and Canada.
Soybean Processing in Argentina Enters Crisis With Threat of Drought (Mar 16)
Argentina's soybean crushing plants are operating at their lowest-ever capacity due to the impact of a brutal drought, the head of the country's main grain processing chamber said on Mar 15. Argentina, the world's biggest exporter of soybean meal and soybean oil, is expected to have a soybean production of 27M MT this season, the lowest in nearly a quarter of a century, as a result of low rainfall and high temperatures. In 2022, exports of soy by-products, Argentina's main source of foreign exchange, totaled USD 18.519B. Gustavo Idigoras, head of CIARA's oilseed and grain processing chamber, said the sector faces a "crisis" with idle industrial capacity approaching 70%, the highest for when there are no protests.
Weak Crop Will Force Argentina to Import More Soybeans From Paraguay and Brazil (Mar 16)
With the estimate of the largest drop in 14 years in 2022/23 soybean production in Argentina due to drought, the United States Department of Agriculture (USDA) projects that the neighboring country would register a record import of grain to complement its weak harvest, so Argentine importers are expected to capitalize on an excellent Brazilian harvest and take advantage of the expected recovery for Paraguay. For the third consecutive month, the USDA estimates new cuts for soybean harvest volumes in Argentina due to the effects of the drastic drought, which would reach 33M MT, the lowest figure in 14 years. To help offset the shortage of national supplies of this grain, the international organization forecasts that during this harvest Argentina could import a record 7.25M MT, an increase of 1M MT compared to the February report and 3.41M MT more than what was acquired in the previous season. Paraguay and Brazil appear as the two main soybean supply options for Argentina. In fact, in the recent Foreign Trade report of the Paraguayan Chamber of Exporters and Marketers of Grains and Oilseeds (Capeco) it is mentioned that at the end of February of this year, 90% of Paraguayan soybean exports were destined for Argentina.
Argentina Again Cut the Estimate for Soybeans (Mar 16)
The numbers of the current agricultural campaign continue to be alarming in the midst of a historic drought. On Mar 16, the Buenos Aires Grain Exchange once again cut the estimate for soybean. They estimated that the Argentine soybean harvest would reach 25M MT in the best of cases. The estimate of soybean production represents, according to the Stock Market, a fall of 44.4% with respect to the average production of the last five campaigns (U5C Production: 45 MTn). Under this productive scenario, the average national yield would be below that of the 2008/09 campaign (Average yield 2008/09: 19.2 qq/Ha).
Area of the 2022/23 Soybean Crop in Argentina May Reach 16M Ha (Mar 17)
The Ministry of Economy of Argentina, through the Secretariat of Agriculture, Livestock, and Fisheries, estimated in its March report that the country should cultivate an area of 16M ha of soybeans in the 2022/23 season, 0.6% below the 16.1M ha cultivated in the 2021/22 season. In relation to the 16.3M ha estimated in February, there was a decline of 1.8%. Argentina's production in 2021/22 was indicated at 44M MT of soybeans, 4.3% below the 46M MT harvested in 2020/21. There were no changes compared to the area forecast in the February report.
Argentina Began to Collect Cabotage Transport Tolls From Paraguay Which Affected Soybean Pass (Mar 17)
A few hours before raising their glasses to say goodbye to 2022, the Argentine government proceeded to unilaterally implement the collection of a toll of USD 1.47/MT for cabotage transport that circulates through the section Puerto de Santa Fe-Confluencia de la Paraná waterway, which is where the barges with Paraguayan soybeans pass, which are then embarked at port terminals in the Rosario area of influence. The cost of the new toll, as is the case with the rate of USD 3.06 per net registered ton shipped in the lower section of the Paraná, must be deducted by the exporting companies from the price of soybeans received by Paraguayan producers, which implies that it became, in fact, a "withholding" applied by one country to another Mercosur country. Paraguayan government officials made different diplomatic and administrative claims before the Argentine government with the purpose of deactivating the measure, but they were unsuccessful.
Analysts Once Again Cut Forecasts for Soybean and Corn Harvests in Drought-Stricken Argentina (Mar 17)
Traders are keeping a close eye on the weather in Argentina, where drought continues to dampen soybean and corn crop potential. A decrease in temperature is forecast for the next week, but the precipitation deficit will remain. In Argentina this week, isolated showers dropped temperatures from 30°C to 25°C, but they came too late to significantly affect late-stage corn and soybean crops. Precipitation may increase in the central regions next week, but the heat that prevailed in early March will also return. The combination of heat and drought worsens the condition of both crops. According to the forecast of the Rosario Grain Exchange, in FY2022/23 the soybean harvest in the country, which is the world's largest exporter of soybean meal and oil, will amount to only 27M MT, which will be the lowest level in the last 25 years. At the same time, the Buenos Aires Grain Exchange (BAGE) reduced the forecast of soybean production in Argentina to 25M MT, although a week ago it lowered the estimate to 29 M MT.
2022/23 Argentina Soybean Estimates Continue to Decline (Mar 17)
The high temperatures of the last 10-15 days were very detrimental to the crops in Argentina. For the early planted soybeans that were filling pods or approaching maturity, the high temperatures and lack of moisture essentially ended the growing season. In the core production areas, the early soybean yields are expected to be down as much as 50% although the later planted soybeans may do better in areas where the rainfall was more plentiful. It is probably safe to say that the nationwide soybean yield will be down 25% or more. The current soybean harvest is probably less than 1%. Not only are the soybean yields going to be very low, but the number of abandoned hectares is also going to be very high. The Rosario Grain Exchange estimated last week that there may be as much as 2.6M ha of soybeans abandoned (6.4M acres), which would be a record amount and equal to approximately 15-16% of the planted acreage, depending on how much was originally planted. This would be three times more than last year and twice as much as the last drought in 2017/18. If we assume that farmers planted 16.2M ha of soybeans in 2022/23 and 2.6M ha will be abandoned, that would leave a harvested area of 13.M ha.
Argentina’s Corn and Soy May See Rain Next Week After Historic Drought (Mar 19)
Argentina’s corn and soybeans may receive desperately needed showers in W12, the Buenos Aires Grains Exchange said on Mar 16, which could be the start of a slow return of rains after a historic drought that has wreaked havoc on crops. Rainfall could total 10 millimeters to 75 millimeters (0.4-3 inches), with some areas seeing up to 100 millimeters, according to a report from the exchange. Argentina’s agricultural producers have been hit by the severe drought, and this season’s soybean harvest is estimated to top out at 27M MT, the lowest in nearly a quarter of a century.
Russia
465K Ha Will Be Sown in the Spring Campaign in Primorye, Russia (Mar 16)
Seasonal field work in Primorye will tentatively begin in late March- early April. According to plans, a total of 465K ha will be sown in the Primorsky Territory. Priority will be given to two main export crops; soybeans and corn. Thus, 295K ha will be occupied by soybeans, and 75K ha by corn. In general, the sowing area in the region will not change compared to last year.
China
China takes a series of measures to stabilize soybean production (Mar 17)
China has taken a number of policy measures in 2023 to stabilize soybean production. China's Ministry of Agriculture and Rural Affairs said on Mar 16 that the mixed policy implemented by various departments under the coordination of the Central Rural Work Leadership Group Office covers many aspects of soybean production. According to the ministry, the country will fine-tune its support policy for corn and soybean producers and take steps to increase the total amount of support. Efforts will be made to increase credit support, provide better technical guidance and accelerate the purchase and storage of soybeans, among other measures. China had pledged to expand the cultivation of soybean and oil crops and increase production capacities in "Central Document #1" for 2023, a key document outlining the policy priorities of work on agriculture and rural areas in the country.
China to Buy More Homegrown Soybeans for Reserves (Mar 17)
China will step up buying of domestic soybeans by state reserves to encourage farmers to keep planting the crop, the agriculture ministry said on Mar 16, as Beijing continues to push for greater self-sufficiency in oilseed. China started to increase soybean planting a year ago amid worries about its heavy reliance on imports of protein-rich beans to feed its huge herd of livestock. But after boosting planting by 22% last year, farmers struggled to sell their crop, which is priced higher than genetically modified imported soybeans and predominantly sold for food use. China will guide its state stock-piler to plan new purchases of domestically produced soybeans in the producing regions of Heilongjiang province and Inner Mongolia, the Ministry of Agriculture and Rural Affairs said in a statement.
Thailand
It Is Expected That the Price of Imported Soybeans Will Stabilize (Mar 17)
The soybean price was maintained at a high level of USD 0.70/kg (24.00 baht) as the weather in Argentina improved rain in farmland. As for Brazil, the harvest continues to be good causing the market to relieve concerns about the amount of output while the amount bought in the market was stable. On the Chicago Futures Exchange, March 15, 2023, soybean seeds Delivery round May 2023 was priced at USD 1,489.25 cents/bushel, and soybean meal delivery round May 2023, priced at USD 478.40/MT. The price has decreased from last week. However, Argentine soybeans that were rated good to very good recently left only 2%, while in Brazil the weather is still good with steady rain. Brazil's soybean harvest progress is 49%, close to the average of 50% on the demand side. The US Oilseed Processing Association (NOPA) reported February soybean oil extraction fell to 165.4M bushels, below January prices, and below analysts' expectations.
South Korea
South Korea expected to produce more soybeans in coming years (Mar 15)
South Korea's soybean production is expected to remain stable in 2023/24 and gradually increase with government incentives aimed at improving food self-sufficiency. Production is estimated at 0.13M MT, unchanged from 2022/23, according to a US Department of Agriculture (USDA) Foreign Agricultural Service report. The government aims to increase its food self-sufficiency rate from 44.4% in 2021 to 55.5% in 2027, with soybeans for food use rising from 23.7% in 2021 to 43.5% in 2027. Soy is the most consumed oilseed in South Korea. Consumption is estimated to increase slightly in 2023/24 to 1.44M MT. Of this total, 1.02M MT will be used for shredding and 0.34M MT will be used for foods such as tofu, soy milk, and soy sauce. Soybean imports are expected to remain unchanged at 1.3M MT. Almost all vegetable flour produced in South Korea is imported soybeans.
Egypt
166K MT of Fodder Worth About USD 81M Were Released Within a Week in Egypt (Mar 13)
Al-Qusayr said that during the period from March 3, 2023, to March 9, 166K MT of corn and soybeans worth about USD 81M were released. He explained that the release included 119K MT of corn worth about USD 43M, and about 47K MT of soybeans valued at 35M as well as feed additives worth about USD 3 M. Al-Qusayr confirmed that the release aims to provide quantities in the market of corn and soy, which are the basic ingredients for poultry feed as well as farm animals. Therefore, the total that was released during the period from (October 16, 2022, to March 9, 2023) is 3.049B MT, of which 2.163B MT are corn 886K MT of soybeans, and feed additives, with a total amount of USD 1.515B. The Minister of Agriculture indicated that there is continuous follow-up and full coordination with the Central Bank and the Poultry Federation for the periodic release of corn, soybeans, raw materials, and feed additives from Egyptian ports.
