Global soyabean prices may moderate on record supplies, says USDA

Global soybean prices are expected to decline in 2023-2424 as a result of record supplies amid slowing demand growth in China, according to analysts.

The US Department of Agriculture, in its latest Global Oilseed Markets and Trade Report, said that despite a lower production outlook for the US, the outlook for global soybean production remains at an all-time high, largely due to a record Brazilian crop and a rebound crop in Argentina. . . “Slowing demand growth in China, economic difficulties in other major importing countries such as Egypt and Pakistan, and record supplies are expected to moderate global soybean prices in 2023-24,” the USDA said.

The 2023/24 forecast for US soybean exports was cut by 3.4 million tons (metric tons) and inventories were reduced by 1.4 metric tons. Crunching is only marginally reduced due to strong demand for soybean oil as a biofuel feedstock. “The United States is likely to remain less competitive than South America in the export market due to tighter supplies and biofuel policy incentives that will keep more soybeans in the domestic market for crushing,” the USDA said.

export restriction

Tight supplies and strong domestic disappearance in the United States will constrain export potential with trading partners, forcing importers to pay higher prices or increase purchases from Brazil. Offsetting changes in global soybean and product trade this month, the USDA said, were larger shipments of soybeans from South America and lower soybean import expectations in key US markets including Egypt and Mexico.

BMI, a unit of Fitch Solutions, maintained its forecast for soybeans at 1,430 cents a bushel (27.2 kg), slightly lower than the current year-to-date average of 1,439 cents. . “After a record harvest in 2022-23, Brazil is expected to produce a second consecutive bumper crop, and our forecast indicates an increase of 3.9 percent year-on-year. In addition, we expect a strong recovery in Argentine production after a decline of 46.6 percent in 2022. /23, BMI said in its latest soybean price forecast.

weather effect

“The recent bullish momentum in soybean prices has been driven by growing concerns about the state of the US crop amid reports of deteriorating crop conditions, as the crop considered good to excellent fell to its lowest level in more than a decade. We expect South American soybean crops to benefit from The shift from La Niña to El Niño.However, while the US Climate Prediction Center has declared an El Niño event, its projected strength is less clear, and it is this that will determine the level of its impact on global production,” BMI said.