Global soyabean prices are seen moderating in 2023-24 on record supplies amidst a slowing demand growth in China, according to analysts.

The USDA, in its latest report on oilseeds world markets and trade, said despite the lower production outlook for the United States, the global soyabean output forecast remains at an all-time high, largely on a record Brazil crop and a rebounding 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 result in moderated global soyabean prices in 2023-24,” the USDA said.

The 2023/24 forecast for US soyabean exports is lowered by 3.4 million tonnes (mt) and stocks are reduced by 1.4 mt. Crush is only lowered marginally on strong demand for soyabean oil for biofuel feedstock. “The United States will likely remain less competitive than South America in the export market due to smaller supplies and biofuel policy incentives which will keep more soyabeans on the domestic market for crushing,” the USDA said.

Constrain exports

“Smaller 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 to global soyabean and product trade this month include larger soyabean meal shipments from South America and lowered soyabean import forecasts in major US markets including Egypt and Mexico,” the USDA said.

BMI, a unit of Fitch Solutions, maintained its soyabean forecast of 1430 cents per bushel (of 27.2 kg), marginally below the current year to date average of 1439 cents. . “Following a record harvest in 2022-23, Brazil is expected to produce a second successive bumper crop, with our forecasts indicating a 3.9 per cent y-o-y increase. Additionally, we expect a strong recovery in Argentinian output following a 46.6 per cent decline in 2022/23,” BMI said in its latest outlook for soyabean prices.

Weather impact

“The recent upward momentum in soyabean prices has been driven by increasing concerns over the state of the US crop amid worsening crop condition reports, with the crop considered good-to-excellent falling to its lowest level in over a decade. We expect South American soyabean yields to benefit from a transition away from La Nina to El Nino. However, while the US Climate Prediction Center has declared the emergence of El Nino, its anticipated strength is less clear, and it is this which will determine what level of impact it has over global production,” BMI said.

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