In W32 in the soybean landscape, the United States Department of Agriculture (USDA) expects 2023/24 global soybean production to decline to 402.79 million metric tons (mmt). The USDA also expects global soybean exports to decrease by 0.5 mmt to 168.8 mmt, primarily attributed to reduced United States (US) exports. Bangladesh, Egypt, and Pakistan registered constrained soybean crushing and imports, resulting in downward adjustments. Global soybean ending stocks are expected to decrease by 1.6 mmt to 119.4 mmt due to diminished stocks in the US.
The Brazilian soybean market experienced a slower pace of transactions in Aug-23, following a Jul-23 marked by increased activity. The shifting trend of contracts on the Chicago Commodity Exchange (CBOT) prompted producers to adopt a more cautious approach, leveraging price spikes for negotiations. While dry conditions in the US pushed Chicago's November bushel price to USD 14.20 in Jul-23 and supported Brazilian soybean trade, Aug-23 registered a drop below USD 13.00/bushel due to improved weather. Safras and Mercado indicate that 75.6% of the projected 2022/23 soybean crop was sold in Brazil until August 7, an increase from 66.1% in Jul-23 and slightly below 2022's 79.9%. Considering an estimated harvest of 156.152 mmt, this translates to a total negotiated volume of 118.105 mmt. Safras forecasts early commercialization of 13.9% for the future crop, involving 22.72 mmt with a projected production of 163.25 mmt. This anticipatory trade percentage was 17.3% in the same period in 2022, with the five-year average standing at 23.5%.
The Rosario Grain Exchange expects Argentine soybean production to increase from 20 mmt in 2022/23 to 48 mmt in the 2023/24 season. Anticipated upward trend can be attributed to a potential 6% annual growth in the planted area dedicated to soybean within Argentina, reaching up to 17 million hectares (ha). The Argentine soybean sowing campaign is expected to start from Oct-23.
China's soybean imports totaled 62.3 mmt in the first seven months of 2023, a 15% increase compared to the same period in 2022. The General Administration of Customs indicates that China’s soybean imports amounted to 9.73 mmt in Jul-23, significantly exceeding the 7.88 mmt in Jul-23 but lower than the 10.27 mmt in Jun-23. The average price of China’s soybean imports stood at USD 605.39/metric ton (mt) in the first seven months, an increase of 1.3% year-on-year (YoY). The imported soybeans are typically crushed to produce pulp used as animal feed within China.
Lastly, the Russian soybean market experienced low activity in Aug-23. This was due to the temporary closure of processing plants for scheduled maintenance. Global soybean oil prices and US dollar fluctuations are expected to influence the market's dynamics. As a result, soybean prices are expected to increase further.
