In W21 in the soybean landscape, IGC in its May projection, estimates global soybean production in the 2022/23 season to reach 364MMT, up 4% YoY, as a record harvest in Brazil more than compensate for the declines in other countries. Also, IGC adjusted downwards its forecast for 2022/23 global soybean consumption by 2MMT MoM, in line with the further deterioration of the Argentine outlook, with stocks increasing slightly by 5MMT to 50MMT. Global soybean trade is expected to be roughly stable MoM and up 12MMT YoY. For the 2023/24 season, IGC projects global soybean production to peak at 403MMT, up 9% YoY due to higher yields in South America. With the expected marginal decline in global soybean demand, IGC expects global inventories to increase. Furthermore, global soybean import demand is expected to increase strongly for shipments from Argentina and Asia. Global consumption is also expected to grow 7% YoY due to higher demand for soy products from the feed, food, and agricultural sectors. IGC expects global soybean trade to reach a record 173MMT in the 2023/24 season, up 3% YoY. Similarly, the USDA forecasts global soybean production in the 2023/24 season to reach 410.59MMT, up 10.8% compared to the 2022/23 season. The increase is attributed to the expected increase in Argentine soybean production to 48MMT, up 77.7% YoY.
Soybean prices are down in the Brazilian domestic and foreign markets due to the conclusion of the harvest in Brazil and the favorable weather conditions for sowing in the Northern Hemisphere. In addition, weakened external demand has also exerted downward pressure on soybean prices, as global consumers postpone their purchases in the expectation of obtaining large volumes at lower prices in the coming weeks. SECEX reports that until W3 of May 2023, Brazilian soybean exports totaled 9.7MMT, with a daily average of 695.8K MT, a slower pace than that recorded until W2 of May 2023 of 732.8K MT/day. If the average daily shipments are maintained until the end of May 2023, the total Brazilian soybean shipments would add up to just over 15MMT, surpassing the 14.3MMT registered in April 2023, and up 41.5% YoY. The USDA reports that as of May 23rd, US soybean planting shifted from 69% in W20 to 84% in W21, around one week ahead compared to the same period in 2022 and two weeks ahead of the average. 43% of US sown soybeans have emerged, 6 days ahead of the average. Furthermore, the USDA indicates that US soybean sales in the week ending May 18th rose to 115K MT, an increase of 17K MT WoW, but down 26% compared to the 5-year average. US soybean sales were mainly destined for Germany (57.7K MT), Japan (53.5K MT), China (25K MT), Indonesia (6.6K MT), and Malaysia (5K MT). The total sales would have been higher, but an unnamed destination canceled orders for 37.7K MT.
Tridge’s data analysis indicates that wholesale Argy soybean prices have edged lower on a dismal demand and a very strong US Dollar. The Tridge Soybean/Cámara Argentina (Necochea) wholesale price benchmark fell 5% WoW in W21 to USD 0.41/kg. Chinese demand for soybeans has been lackluster limiting any upside potential for Argentine soybeans. Adding to this is the US Dollar which has appreciated against a basket of other currencies making soy denominated in the USD more expensive for buyers holding other currencies. Current Argy soy fundamentals are also looking comfortable with the 2023 crop expected to be up 21MMT to 48MMT. With the current supply, the upside risk is limited at least into Q4 2023. Lastly, in W20, the Buenos Aires Grain Exchange estimated Argentine soybean production in the 2022/23 season at 22.5MMT, unchanged from W19 estimates. However, experts estimate that 1.45M ha of soybean will be abandoned due to the drought, approximately 8.9% of the total planned area depending on the starting acreage. As of W20, Argentine soybean harvesting reached 51.6%, behind the 70.6% achieved in the same period in 2022 and the 74.2% average, but an advance of 15% WoW. Of the soybeans harvested so far, the average yield in W20 was 1,560 kg/ha, down 13.45kg/ha WoW. The average yield of the early-planted soybeans is 1,600 kg/ha, while the average yield of the late-planted soybeans is 1,140 kg/ha. Argentine soybeans were rated 59% poor/very poor, 57% fair, and 4% good/excellent as of W20, with the good/excellent percentage up 2% WoW. The soil moisture for the corn was rated 46% short/very short and 54% favorable/optimum, with the favorable/optimum percentage up 5% WoW.
