Dr. Ken Rietz
Successful Farming says that US soybean output in the 2023/2024 marketing year likely will be projected by the agency at 153.2 million metric tons, the poll said. That would be down from the January outlook for 157 million tons. But the price in the US has dropped. As always, there is more going on behind the scenes. First, here is the price of the front month contracts for US soybeans since January 2023. Note how this year’s price is down roughly −20% from early last year. This price is the lowest since early 2020.
We will focus on the three largest soybean consumers and producers: China, US, and Brazil. China is the largest importer of soybeans, to the extent that Brazil (the largest exporter of soybeans) is arguably dependent on Chinese imports of soybeans. Since the Chinese economy is becoming more unstable, this is a concern. The US is less dependent on China. But the price of soybeans is highly dependent on Chinese imports. This is a source of unpredictability that is hard to eliminate.
The USDA FAS office predicted a record-setting soybean crop for Brazil as late as October 2023, but the weather did not cooperate. Brazilians planted an early soybean crop, but those crops are poor. Later plantings seem to be doing somewhat better, but still not doing well. But the soybean meal from that first crop should hit the markets earlier than usual. The NOAA weather forecast for the next month for Brazil is not encouraging, with decent rainfall in small parts of northern Argentina and very little extra rain in southern Brazil. On the other hand, the soybean crop yields from the US should still supply a large portion of the soybean meal that the world needs from production and storage (as indicated by the much lower price), although this puts China in the awkward position of importing from the US.
The overall situation for soybean prices is unstable. However, a mildly bearish slant seems more likely than alternatives. Keep a close eye on the Chinese economy and southern Brazilian weather, either of which could affect those prices considerably.