W37: Soybean Update

Published Sep 21, 2023
W37: Soybean Update

In W37 in the soybean landscape, the soybean market in Mato Grosso do Sul in Brazil remained stagnant, characterized by prolonged uncertainty in the state. Factors contributing to a stagnant situation included a weakening United States (US) dollar and a lack of motivation among producers to engage in trade, which persisted for approximately three weeks. The anticipation of an upcoming cycle with increased soybean demand is yet to materialize. Prices in various regions reflected this sluggishness, with prices in Dourados at USD 26.13/bag, Maracaju at USD 25.92/bag, Sidrolândia at USD 25.72/bag, Campo Grande at USD 26.13/bag, and Chapadão do Sul at USD 25.51/bag.

Meanwhile, the soybean market in Mato Grosso in Brazil displayed a mixed performance, oscillating between moderate increases and declines, largely influenced by the fluctuations in the US dollar. Some regions experienced price increases due to domestic trade, while others responded to the global market fluctuations with mild declines. The soybean market in the Matopiba region remained static, primarily focusing on corn across all states in the complex, particularly in the Maranhão region.

Agrinvest Commodities reported new developments regarding China's demand for Argentine soybeans, with three positions of the Argentine product being confirmed for Sep-23 and Oct-23 shipments. Argentina has become more aggressive in selling soybeans to China, partly due to a new round of the 'soy dollar,’ which benefits both buyers and sellers. These measures are part of Argentina's Export Increment Program (PIE), designed to stimulate foreign exchange generation, create new businesses, and guarantee financial commitments with the International Monetary Fund (IMF). Soybean sales in Argentina exceeded 1.5 million metric tons (mmt) until September 12. Although this volume is lower than previous sales, it reflects uncertainties and reduced stocks after 2022’s significant harvest loss due to adverse weather.

Paraguay’s soybean exports reached 4.7 mmt, valued at USD 2.56 billion in Aug-23, a significant increase of 129.27% in volume and a notable surge of 132.73% in value compared to the same period in 2022. The Paraguayan Chamber of Exporters and Marketers of Cereals and Oilseeds (Capeco) indicates that the entire soybean complex generated a revenue of USD 3.46 billion by the end of Aug-23 due to the surge in soybean exports, including its deliveries. Argentina remains the predominant destination for Paraguay's soybeans, accounting for 91% of the total exports, followed by Brazil (2%), Chile, South Korea and other destinations (7%).

Lastly, Russian soybean prices witnessed substantial support in Aug-23, primarily driven by a scarcity of old crop stocks among buyers. This demand growth is attributed to the heightened capacity utilization of major processing facilities in the Central Federal District. Rising soybean meal prices are expected to bolster soybean rates for approximately two more weeks until the widespread harvesting in the region begins. Additionally, reduced soybean yields in the southern region of Russia constrained the actual soybean supply in the market. Experts indicate that soybean prices will likely remain elevated at their current levels until the end of Sep-23, after which a downward trend may become plausible.

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