In W22 in the soybean landscape, SAFRAS and Mercado indicate that as per the schedule of shipments in Brazilian ports, May soybean exports totaled 15.245 million mt, up 9.2% MoM and 50.4% YoY, with the volume already shipped as of May 29th amounting to 12.194 million mt. Brazilian soybean exports through the ports in June 2023 are estimated to reach 8.531 million mt, down 30% MoM. In the January-May period, shipment schedules indicate that Brazilian soybean exports reached 52.1 million mt, up 17.5% compared to the same period in 2022. AgResource Brasil estimates the 2022/23 Brazilian soybean harvest at a record 155.15 million mt, an increase of 1.2 million mt compared to the previous forecasts. This is linked to better yields and favorable conditions in the states of Mato Grosso, Mato Grosso do Sul, and Paraná. As a result, AgResource Brasil adjusted upwards Brazilian soybean export projections by 500 thousand mt to 97 million mt due to the strong global demand and the impact of drought in Argentina. The USDA indicates that as of the week ending May 25th, US soybean export inspections were pegged at 239.74 thousand mt, up 73.15 thousand mt WoW, but down 164.61 thousand mt YoY, with shipments mainly destined for Indonesia and Mexico. So far in the 2022/23 season, US soybean inspections are 48.45 million mt, down compared to 49.55 million in 2021/22. The USDA also reports that as of May 28th, US soybean planting reached 83%, ahead compared to 65% on average, with 56% emerging, up compared to the typical rate of 40%.
In Argentina, the average yield of soybean harvested so far stands at 1,520kg/ha, down 40.35kg/ha WoW and the lowest in 14 years. Soybean yields in the northern core region of Argentina are averaging about 1,800kg/ha, while yields in the southern core are averaging about 1,500 kg/ha. In northern La Pampa and western Buenos Aires, soybean yields are approximately 1,900 kg/ha. The Buenos Aires Grain Exchange estimates that 2.088 million ha of Argentine soybeans will be abandoned, approximately 12.8% of the planted area due to drought that Argentina is experiencing. In W22, the Buenos Aires Grain Exchange adjusted downwards Argentine soybean production by 1.5 million mt to 21 million mt. The 2022/23 Argentine soybean harvesting reached 70% in W21, up 18% WoW but behind the 85% achieved in the same period in 2022 and 85% on average. In W21, Argentine soybeans were rated 56% poor/very poor, 40% fair, and 4% good/excellent. The good/excellent percentage was unchanged compared to W20. The soil moisture for the soybeans was rated 49% short/very short and 51% favorable/optimum. The favorable/optimum percentage was down 3% from the prior week.
South Africa’s Crop Estimates Committee projects the 2022/23 South African soybean harvest at 2.8 million mt, up 24% YoY and unchanged from April’s estimate. The crop improvement is due to an expansion in the area planted and the higher-than-expected yields. The ample soybean harvest indicates that South Africa could meet its domestic demand and remain with over 300 thousand mt of soybeans for export markets. This soybean export expansion is a new territory for South Africa, which until recently, had been a net importer of soybeans and soybean products, and positive for the agricultural trade balance. Lastly, Chinese soybean crushers are expected to slow their Q3-2023 demand coverage as soybean meal prices are on a downward trend, resulting in deteriorating crush margins and lower estimates for total open demand. According to Platts's assessment, China’s soybean gross crush margins as of May 29th stood at USD minus 12.43/MT, down USD 10.67/MT WoW. Also, the Chinese soybean industry indicates that, as of May 29th, the replacement crush margin stood at USD 23.02/MT, down 64% WoW. Experts indicate that the fall in soybean meal prices and crush margins is due to the reduction in soybean meal sales and higher expected production in the coming month. A decline in soybean meal prices would continue to put downward pressure on crush margins and discourage crushers from purchasing more forward shipments. In Q1-2023, the Chinese soybean market’s initial estimates for total open demand for Q3-2023 shipments stood at 19.5 million mt, with 7.5 million mt for July, 6.5 million mt for August, and 5.5 million mt for September. Experts indicate that as of May 29th, 60% of the total open demand for July shipment, has been covered. For August, less than 20% of total open demand has been covered, while total open demand covered for September shipment was at less than 5%.
