In W39 in the soybean landscape, DATAGRO Grãos expects the soybean harvest in South America to reach 231.28 million metric tons (mmt) in the 2023/24 season, a substantial 20% year-on-year (YoY) increase. The planted area is anticipated to expand by 7% YoY to 68.26 million hectares (ha), the seventh consecutive annual growth. The potential impact of the El Niño phenomenon is viewed favorably, coupled with reduced production costs, indicating a positive utilization of inputs for the upcoming harvest.
Brazil, the largest soybean producer, is expected to contribute 163 mmt, a 4% YoY surge, covering 45.37 million ha. Argentina’s soybean planted area is forecasted to recover, increasing from 16 million ha in 2022/23 to 17.05 million ha in 2023/24. With favorable weather conditions, Argentine soybean production is estimated at 50.5 mmt in 2023/24, a remarkable 135% YoY increase. DATAGRO Grãos predicts Paraguayan soybean production to reach 10.65 mmt in 2023/24 from a planting area of 3.55 million. These projections signal a positive trend, driven by favorable weather and reduced production costs, though they depend on ideal conditions and potential disturbances like pests or diseases.
Donau Soja anticipates a record European Union (EU) soybean crop in 2023. The European harvest is expected to reach 11.5 mmt in 2023, a substantial increase of over 16% YoY. The countries of the EU are set to contribute approximately 3 mmt from 1.1 million ha in 2023, a growth of 750 thousand metric tons (mt) from 2022. This boost in EU harvest is attributed to improved weather conditions and increased precipitation compared to the dry periods experienced in 2022. Despite ongoing challenges, including conflict, Ukraine presents an auspicious outlook due to expanded soybean cultivation and increased yields. Austria, Italy, Romania, and Hungary are also poised for significant production increases.
This production surge in Europe signifies a notable shift towards meeting a significant portion of the continent's soybean demand domestically. This will align with Europe's stringent food safety and non-genetically modified organism (GMO) commitments. Furthermore, the European non-GMO soy premium remains historically low compared to genetically modified soy from foreign sources. This situation makes EU soybean to be an attractive option for the food industry. Soybeans are gaining ground as a resilient and economically favorable alternative to crops like corn, which are more susceptible to weather and market fluctuations.
Soybean prices in Russia stabilized in W39, remaining at a comfortable level both for processors with favorable crush margins, and farmers, especially when compared to other crops. However, a 7% duty on soybean oil and meal, effective from October 1, is expected to have a negative effect. This duty introduction is also anticipated to affect the cost of raw materials (soybeans). As the active harvesting phase unfolds in the Central and Volga Federal Districts, a downward price trend is anticipated during Oct-23. Experts indicate that this downward price shift is unlikely to be prolonged.
Lastly, Safras and Mercado expect Brazil's soybean exports to reach a record 99 mmt in 2024, surpassing the 98 mmt estimated for 2023. This positive outlook is underpinned by expectations of a robust 2023/24 harvest, currently in progress. Safras and Mercado also predict a record soybean crushing in Brazil, totaling 55 mmt in 2024, an increase from 53 mmt in 2023. Brazilian soybean supply is set to increase by 6% YoY to 168.87 mmt in 2024. Soybean demand is projected to reach 157.7 mmt in 2024, a 2% YoY growth, resulting in a 103% YoY rise in ending stocks to 11.17 mmt.
