W12: Weekly Soybean Update

Global

Global Analysis of Harvest Grain (Mar 20)

The global soybean market is currently under serious pressure due to forecasts of a record soybean crop in Brazil. In addition, serious pent-up pressure should be noted. Brazilian farmers are currently holding back sales. According to Datagro, only 34% of the record harvest is contracted, 12% less than a year ago. In the Russian market, the situation is quite similar, as in the 2022/23 season, soybean production increased by 26% compared to the previous season. 

Europe

EU Soybean Imports Reached 8.45M MT (Mar 22)

European Union soybean imports for the 2022/23 crop year beginning July reached 8.45M MT as of March 19, down 14.6% from 9.89M MT for the same period in the previous crop year. The bloc's soybean meal imports in the same period stood at 11.24M MT, down 4.6% from 11.78M MT in the previous crop year. However, the Commission said it was still having problems compiling grain trade figures from Germany and Italy. Export data submitted by Germany from November may not be accurate after the country switched to a new declaration system, while Italian import data is only up to January 13.

South America

Datagro Reduces Projection for 2022/23 Soybeans in South America After la Niña Effects (Mar 22)

The soy harvest in South American producing countries should total 193.52M MT in the 2022/23 harvest, Datagro Grains estimated on Mar 22, with a cut to the 218.16M MT projected in November, after a drought that impacted several regions. Despite the adjustment, the volume produced by Brazil, Argentina, Paraguay, Bolivia, and Uruguay, if confirmed, will still be 5% greater than that of the previous crop, according to the consultancy. Planted area stood at 64.33M ha for the mainland, slightly below the 64.50M ha seen in the 2021/22 season. Brazil, the largest global producer, and exporter of the oilseed have the most promising performance in South America this season. 

Brazil

Harvest Advances and Soybean Prices Drop In Brazil; Producer Negotiates More (Mar 20)

The advance of the harvest of the biggest soybean crop in the history of Brazil is determining the drop in prices in the domestic market. Without many options and faced with a scenario of expanding supply, producers negotiate, taking advantage of the spikes, and expanding sales. Due to the large Brazilian harvest and negative global financial conditions, prices also dropped on the Chicago Stock Exchange. Contracts maturing in May had a devaluation of 1.03%, closing on Mar 16, at USD 14.91 ½ per bushel. The commercial dollar rose 0.58% in the period, reaching USD 1.02 (R$5.238) and easing the negative impact of futures contracts. Highlight once again, the drop in premiums in ports, which remain negative. The increase in supply and the willingness of negotiators were also reflected in shipments, mainly for the period between April and July. A 60kg bag fell from USD 32.51 (R$ 167.00) to USD 32.12 (R$ 165.00) in Passo Fundo (RS) in W12. In Cascavel (PR), the price dropped from USD 31.54 (R$ 162.00) to R$ USD 30.18 (155.00).

Soybean Harvest Goes to 62%, but Rain Holds Pace Again, Says AgRural (Mar 20)

The area cultivated with soybeans in the 2022/23 harvest was 62% harvested in Brazil until Mar 16, compared to 53% a week ago and 69% in the same period last year, according to data from AgRural. Despite good progress in some states, work slowed down due to the rains. Except for Rio Grande do Sul, where the drought continues to reduce production, productivity reports remain high throughout the country. With the planting window already closed in the entire Center-South region of Brazil, in the later areas of the region, it came to an end on March 15.

Without Drought in Rio Grande Do Sul, Brazil Would Have Room to Harvest 160MT of Soybeans (Mar 21)

Brazil's soybean crop is expected to reach 155M MT in 2022/23 but could be closer to 160M MT were it not for a drought in Rio Grande do Sul due to the La Niña weather phenomenon, which reduced the national productive potential, assessed on Mar 21 to Agroconsult. After technical analyzes during the Rally da Safra expedition, the consultancy raised its forecast for the country's soy harvest, compared to the 153M MT previously announced. Concerning January, when the expedition began, Agroconsult observed advances in the production indexes of eight States, with emphasis on Mato Grosso, and a decrease only in the crops in Rio Grande do Sul, considering that within the Rio Grande do Sul there are cases of very negative productivity, but also of “full” crops. 

Soy Exports Grow in Brazil Amid Argentina’s Absence (Mar 21)

Brazilian soybean exports reached 5.2M MT in February 2023, a 6.2-fold increase from the previous month, according to Conab data. The absence of Argentina, an important global player in soybean meal and oil exports, contributed to this increase, generating greater demand for Brazilian derivatives and boosting national exports. The ports of Arco Norte increased their share of Brazilian exports, reaching 39.7% in February 2023, while the port of Santos sold 39.1% of the country's exports. The states of Mato Grosso, Goiás, Rio Grande do Sul, and Minas Gerais were the main suppliers of cargo for export. The soybean harvest also faces climatic challenges, with excessive rainfall in Paraná and drought in Rio Grande do Sul, affecting production. However, in other states, such as Mato Grosso, Goiás, Minas Gerais, Tocantins, Maranhão, and Piauí, harvests progress at a normal pace or with good conditions. The reduction in soybean supply in Argentina, due to high temperatures and water deficit, may favor Brazilian participation in the international market, especially considering the expectation of an increase in Brazilian soybean production of 20.6% this season, according to Conab.

Soybean Exports From Brazil Grow More in March, Says Anec, Who Sees an Increase in the 1st Quarter (Mar 21)

Brazil is expected to export 15.4M MT of soybeans in March, up by around 500K MT from the previous week's forecast, the National Association of Cereal Exporters (Anec) pointed out on Mar 21 which now also sees Q1 growth over 2022. If the expectation is confirmed, Brazil should increase exports in the first quarter by around 330K MT compared to the same period last year, due to a strong increase of 3.2M MT in March compared to the total shipped in the same month of 2022, according to Anec data, which consider shipments and vessel scheduling. Brazilian soybean exports in the first quarter are now estimated at 23.88M MT, up from 23.55M MT in the same period last year. The growth takes place amid a record Brazilian harvest, which should exceed 150M MT, up 20.6% compared to last year.

Abiove Projects 153.6M MT of Soy This Year in Brazil (Mar 22)

The Brazilian Association of Vegetable Oil Industries (Abiove) updated the projections for the 2023 soybean harvest and concluded the closing of 2022. The projections for the current cycle remain optimistic, pointing to the record production of 153.6M MT of soy, mainly due to the recovery of the historical trend of productivity, in addition to the expansion of the cultivated area. The Brazilian market can also register a new crushing record with 52.5M MT. Soybean meal production stands at 40.2M MT and soy oil at 10.7M MT. Domestic consumption of soy oil was updated to 8.95M MT, considering the 12% blend of biodiesel as of April. The projections for this year's exports indicate that soybean grain volume is at 92.3M MT, soybean meal at 20.7M MT, and soybean oil at 2.15M MT. The expected revenue from shipments of soy complex products may exceed USD 66B this year, yet another historic record.

New Caterpillar Species Attack Bt Soy (Mar 22)

A 'new' species of caterpillar has been attacking soybeans with Bt (Bacillus thuringiensis) biotechnology, which should confer resistance to the pest. According to an alert from specialists, it is Rachiplusia nu, which appeared under high pressure in several points of the Brazilian agricultural frontier and is characterized by the plant's high defoliation power. “From what we noticed, the caterpillar pressure increases crop after season and the trend is that this will become a new problem. Rachiplusia nu is an important defoliator. It leads to a decrease in the crop's leaf area and potential losses of around 30%”, points out Germison Tomquelski, a researcher at Desafios Agro, in Chapadão do Sul (MS). According to Tomquelski, the central region of the country, including Mato Grosso do Sul, was one of the areas most affected by the caterpillar. “There are still cases located in Goiás, Minas Gerais, São Paulo, Mato Grosso, and Paraná”, observes the researcher who, after traveling through several productive areas of the country in recent months, revealed that the 2022/23 harvest marked the greatest pressure from Rachiplusia observed until today.

Soybean Harvest in Rio Grande Do Sul Reaches 4% Of the Area (Mar 23)

The soybean harvest reached 4% of the areas of Rio Grande do Sul in 2022/23, an increase of 3% points in one week, but with a strong delay compared to previous years and still with insufficient rain for the developing crops, said Emater-RS on Mar 23. In the same period of the previous cycle, jobs were at 14% and the historical average was 21%. The crops already harvested present yields between 300 and 3K kg/ha, informed the state company, given the climatic irregularities that occurred in the State throughout this cycle. Most of the areas are in the grain filling phase, 52%, when there is still a need for rain to define the yield and the scenario remains adverse. 

United States

USDA Brings Weekly Shipments of Soybeans as Expected (Mar 20)

The figures for weekly US grain shipments reported on March 20 by the USDA (United States Department of Agriculture) came in line with market expectations for soybeans. In the week ended March 16, the country shipped 716.62K MT of soybeans, against the expected range of 350K MT to 800K MT. In every commercial year, the volume shipped already reaches 44.062M MT against just over 42M in the same period last year. 

Weekly Sales of 2022/23 Us Soybeans Come In Below Expectations (Mar 23)

Soybean sales for the 2022/23 crop in the period totaled 152.5K MT, down 77% from the previous week and 55% below the four-week average. The main destination was China. The market expected between 400 and 900K MT. In every season, the total oilseed already compromised by the country reaches 49.48M MT out of a total estimated by the USDA of 54.84M MT. For the 2023/24 harvest, sales totaled 199K MT, mainly to unknown destinations. The expectation was for a volume between 0 and 200K MT in this report.

A Bear Market With the Oil Industry in Negative Margins in the US (Mar 26)

Soybeans are entering a bearish market or new crop mode. As the days of the calendar go by, the prices of available soybeans and future short positions, March and April, are falling in search of the price level of the new crop. The bearish scenario for soybeans in Chicago is added, given the steady progress of the soybean harvest in Brazil. The mid-week close for soybeans on the Matba-Rofex indicated an available price of USD 396/MT, while for May the new crop closed at USD 381/MT, a drop of USD 15/MT between the soybean price old and new harvest. To the downside in Chicago, one must add the negative milling margins of the soybean oil industry, which play as a potential bearish correction factor for the market. The available soybean market supply is very low and is not enough to compensate for the daily milling volumes.

Argentina

Above-Average Temperatures Continue to Cause Losses in Summer Crops in Argentina (Mar 20)

The absence of precipitation together with higher-than-average temperatures shortened the duration of critical stages for the formation of soybean yields. To date, 33.6% of the suitable surface is between R6-R7. Rainfall registered in the NOA, NEA, South of Córdoba, North of La Pampa-West of Buenos Aires, Center and Southeast of Buenos Aires improved the water condition, decreasing by 4% the condition between Regular-Drought. Despite these records, 7.5 of 10ha are in a Regular-Bad crop condition, with expected losses of up to 50% compared to the average of recent years. In turn, the high temperatures continue to generate new losses of the harvestable area in second-rate soybean plantations, mainly in the Center-North of Santa Fe, North Nucleus, South Nucleus, and Center-East of Entre Ríos, affecting the estimate of total production soy.

Argentine Soybean Crushers in Crisis Mode (Mar 21)

Soybean crushers in Argentina are in “crisis mode” due to low supplies of soybeans amidst the worst soybean crop in nearly a quarter of a century and farmers holding tight to their remaining soybean stocks. The combination of drought and slow farmer selling has pushed the crushing industry to idle at nearly 70% of its capacity, which is the highest on record outside of labor protests. The soybean harvest has not started and when it does, the total 2022/23 soybean production could be in the range of 27-28M MT or lower. In 2021/22, Argentina produced 43.9M MT of soybeans. Everything that could go wrong has gone wrong in Argentina this growing season from the worst drought in 60 years to numerous waves of record high temperatures to record low temperatures and even mid-summer localized frosts. The adverse conditions have convinced farmers to hold tight to their existing soybean stocks and to be very reluctant sellers of their anticipated 2022/23 production. In February, farmers sold 622.3K MT of soybeans which was about one-third of the 1.7M MT sold in February 2022.

Argentina’s Soybean Crop Sinks Due to Drought (Mar 22)

In recent days, the US Department of Agriculture (USDA) announced yet another cut in its forecast for the Argentine soybean harvest due to the summer 2022 drought. A reduction of another 8M MT, compared to the February indications, brought the country's soybean production forecast to 33M MT, the worst result in 14 years. The prospect, according to analysts, will have considerable implications on the world trade in soybeans, widely used for the extraction of oils, but also for the production of cakes and flours to be used for animal feed. The latest estimate on the Argentine harvest could also undergo further downward corrections, based on the experience of the previous two dry years, those of 2009 and 2018, which turned out to be significantly worse, in terms of impact on yields, compared to the initial estimates. However, some suggest a less negative reading of the data, starting from the observation that the aggregate production of Brazil, Argentina, and Paraguay is 196M MT, up 10% on the last campaign. 

Soybean Imports by Argentina Should Jump 139% In 2022/23 With Drought, Says Stock Exchange (Mar 23)

Argentina's soybean imports are expected to more than double this season due to the devastating impacts of a historic drought on the country's 2022/23 crop, the Rosario Stock Exchange said. Argentina is the world's biggest exporter of soy oil and meal, due to a powerful grain processing industry that can crush up to 73M MT of the oilseed a year, but severe drought losses are accentuating the need for grain imports from Paraguay and Brazil. The exchange predicts that Argentina will import 7.9M MT of soybeans this season, 139% more than the previous season, with a harvest of just 27M MT, down from 42.2M MT last season. 

Buenos Aires Exchange Cuts Argentina’s Soybean Crop Again (Mar 23)

The Buenos Aires Cereals Exchange cut its projection for Argentina’s soybean crop from 29 to 25M MT. The new reduction reflects the unfavorable climate for cultivation, combining the absence of rain in the central region of the growing belt, late frosts, and very high temperatures. In comparison with last year, when 43.3M MT were reaped, crop failure would reach 42.2%. Dry weather and high temperatures continue to generate yield losses in much of the agricultural zone, the report said. Collaborators report pod abortion, expected yield below historical lows, and total loss of the harvest, with the center-east of Entre Ríos being the most affected region. Concerning trading, according to the weekly report by Argentina’s Ministry of Agroindustry, released on March 8, the sales of the 2022/23 soybean crop in the country amount to 4.616M MT.

Rains Arrive Late for Argentine Soybeans (Mar 24)

The rains recorded in the last seven days improved the water condition of the area planted with soy in Argentina. However, the Buenos Aires Grains Exchange clarifies that this improvement will not affect expected soybean yields, given the advanced phenology of the crop. So far, 39.5% of the surface is between the full filling and physiological maturity (R6 - MF), while sectors in the center of the agricultural area have started harvesting the first noble soy fields. In this scenario, the projected production of 25M MT is maintained, 44.4% below the average of the last five campaigns (U5C average production: 45M MT). In the Center South, localities such as Junín and Baigorrita reported harvests between 10 and 15 qq/Ha respectively, while in the Center-East of Entre Ríos and Southern Córdoba, yields of 7 qq/Ha were reported in localities such as Crespo and La Carlota, respectively. At the same time, 67.7% of the area suitable for second-rate soybeans is between the beginning of fruiting and full grain filling (R3-R6).

Rosario Grain Exchange Expects Crops Harvest in Argentina (Mar 24)

The soybean harvest in the country in 2022/23 MY is expected to be 27M MT, which is planned to be harvested from 13.3M ha, previously at 42.2M MT from 15.2M ha. Against the backdrop of a reduction in production, Argentina's soybean imports are expected to increase to 7.9M MT (4.6MT). Domestic oilseed consumption in 2022/23 MY is expected to be 35.4M MT, including the processing of 30.3M MT. Exports are forecast at 2.8M MT compared to 5.6M MT a season earlier. Ending stocks of soybeans could reach 1.9M MT (-3.3M MT/ year).

Ukraine

Ukraine Collected a Record Amount of Soybeans for the Year (Mar 20)

Over the past year, 3.7M MT of soybeans were harvested in Ukraine, having sown more than 1.5M ha. This indicator is 7% higher than the data of the previous year. According to experts, soy remains an incredibly important product for protein supplies to Europe. About 658K MT of Ukrainian soybeans were certified as a product that meet the principles of sustainability. In other words, 17.5% of total soybean production in Ukraine is not genetically modified. The specified soybean is grown on land plots without cutting down forests and without changing the target land use, which is prescribed in the standards of the "Danube Soya" Association. Ukrainian farmers comply with EU standards in the field of plant protection, reduction of greenhouse gas emissions, and other requirements. It should be noted that the entry into force of the updated EU regulatory rules is planned for 2024. Ukrainian farmers achieved high results due to the Protein Partnership Program, which supports the production of non-GM soybeans.

In Ukraine, the New 2022/23 Season Forecast Shows Soybean Harvest to Exceed 4M MT (Mar 22)

The 2022 soybeans harvested were 3.8M MT, up 8% YoY according to UkrAgroConsult estimates. There was an increase in area with a decrease in productivity. For Sep 2022-Feb 2023, the first half of the 2022/23 season, soybean exports remained higher than last year. The January, 2023 exports even exceeded 400K MT, the record of monthly shipments in the 2022/23 season. Total soybean exports for the six months of the current season amounted to about 1.95K MT, the second largest total exports, twice as much as in the previous season. Soybeans are shipped to foreign markets through the “grain corridor” mainly. For Sep 2022-Febr 2023, more than 70% of the soybean export potential was shipped to foreign markets. 

The Soybean Harvested in 2022 Was 250K MT Larger Than a Year Earlier in Ukraine (Mar 22)

According to the Ministry of Agrarian Policy, Ukrainian farmers harvested 3.74M MT of soybeans from 99.6% of the area in 2022 and this was 250K MT more than in 2021 (3.49M MT), according to the State Statistics Service. This is explained by the fact that, despite the general reduction of cultivated areas in Ukraine due to Russian military aggression, Ukrainian farmers sowed more soybeans in 2022 than in 2021, 1.5M ha against 2021’s 1.3M ha. At the same time, the average crop yield in 2022 was 24.3MT/ha, while a year earlier it was 26.4MT/ha. The decrease in productivity is due to unfavorable weather conditions and sometimes a violation of technology. In 2023, the area sown under soybeans is forecast to increase to 1.841M ha, up 334K ha, and the harvest is at the level of 3.9M MT.

Ukrainian Soybean Exports to the EU Have Reached a Historic High (Mar 24)

This season, Ukrainian farmers declared a record volume of soybeans for export over the last three seasons, 1.9M MT, APK-Inform reports. Ukraine sent 51% of the specified volume of production to the countries of the European Union. Thus, Ukrainian farmers managed to sell 981MT of soybeans to European countries. This is a historical maximum for this direction. Currently, Ukraine has taken third place among the top suppliers of soybeans to the European Union. The Ukrainian share of the total import of this crop in this region is 13%. In previous seasons, Ukraine occupied only the fourth position in the above ranking. In 2021/22, this indicator reached only 4%. It should be noted that Brazil is considered the world's largest exporter and producer of soybeans. The relative availability of space and the tropical climate help to comfortably grow corn and soybeans. According to Minagro, 335.5K ha of land was sown with soybeans in 2022.

China

China Increases US Soybean Imports as Brazil Harvest Delay (Mar 20)

China's US soybean imports rose 15.4% in the first two months of 2023, as harvest delays in top supplier Brazil prompted buyers to seek more grain from the US. The world's largest buyer of soybeans, China imported 11.59M MT of the oilseed from the United States, compared to 10.04M MT in the previous year, data from the General Administration of Customs showed. Already imports from Brazil fell 36%, to 2.24M MT. Rains delayed the harvest in Brazil's main growing regions and also slowed the movement of soybeans to ports, according to some analysts. Total imports in the period hit a record 16.2M MT swt, data showed earlier this month, as buyers stocked up in anticipation of this year's healthy demand.

Soybean Outlook in China (Mar 22)

Modest growth in the animal protein sector is expected to raise China’s soybean imports to 97M MT in Marketing Year 2023/24. Based on data from the General Administration of Customs of the People’s Republic of China (GACC), imports surged following the removal of zero-COVID policies in December to reach a combined 16.2M MT in January – February 2023, a 16% YoY increase. Following a significant increase in soybean area and production in MY 2022/23, policies supporting soybeans are expected to continue, yielding an additional 400K MT of production in MY 2023/24. Soybean crush volume is forecast at 95M MT in MY 2023/24, compared to an estimated 94M MT in MY 22/23. Total MY 2023/24 protein meal feed use is forecast to increase by 1.4% YoY to 98.1M MT.

Bolivia

Floods Take a Toll on Northern Soy Farmers in the Harvest Season (Mar 23)

Eliazer Arellano, president of Grupo Norte Chane-Peta Grande, reported that they are in the soybean harvest season, but the rain has affected productivity. They have also wanted to replant and have not been able to, because they have to wait for the soil to be dry before they can sow sorghum. He stated that due to the past floods, nothing could be done taking into account that the harvest season has already begun and in San Julián they have 30% progress and in the north zone they are 5%. He stated that the borders are closed to soybeans and that harms them even more, on the other hand, they are also being affected by smuggled soybeans, as he assures that the soybeans in the northern zone are well cornered.

Ghana

Price of Ghana’s Non-GMO Soybean Oil up by 10% MoM in W12 (Mar 23)

The price of non-GMO soybean oil produced in Ghana has risen by almost 10% MoM in March 2023 due to an increase in the demand for non-GMO soybeans used in production at the various farm gates. In W12, the non-GMO Soybean oil price stood at USD 1.55K/MT compared to USD 1.4K/MT in W8. Prices of the commodity are expected to keep rising in the domestic market as Ghana is entering the off-peak season.