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  • USDA Foreign Agricultural Service

Plummeting Argentina soybean production impacts global soybean, products trade


Source: USDA FAS

For the third straight month, 2022-’23 Argentina soybean production is lowered as hot and dry weather continues to strain the crop in key growing regions.


This month, production is down 8 million tons to a 14-year low of 33 million.


Likewise, crush is forecast at the lowest level in over a decade.


Plummeting Argentina supplies and crush will have implications on global trade of soybeans, protein meal, and vegetable oils over the coming months.


To help offset tight domestic soybean supplies, Argentina imports (October-September) are forecast to be a record at 7.3 million tons.


Argentina importers are expected to capitalize on a record Brazilian crop and recovery in Paraguay production to supplement the weak domestic crop.


As a result, Argentina is expected to have the second-largest spike in soybean-import growth in 2022-’23, behind China.


For soybean products, overall trade is forecast down this month.


Global soybean meal trade is down more than 1 million tons from last month as tight Argentina supplies support already high prices and shift some demand into other protein meals.


Likewise, global soybean-oil trade is down more than 2 percent this month as high Argentine and U.S. prices shift demand to palm oil, rapeseed oil, and sunflower-seed oil.


Partly offsetting lower exportable supplies from Argentina, Brazil soybean-oil exports are up this month and forecast just below last year’s record. However, the government of Brazil is scheduled to meet in March* to decide the mandatory biodiesel blend rate, which currently sits at 10 percent. If the blend rate is raised, then exportable supplies could be lower. This would further push up soybean-oil prices and cause importers to rely more heavily on other vegetable oils.


Global oilseed production is lowered 7 million tons to 630 million predominantly on large reductions to Argentina soybean and sunflower-seed and India cottonseed crops. These changes are only partially offset by increases to the Australia and Ukraine rapeseed crops.


Oilseed trade is increased with higher volumes of soybeans from the United States and Brazil, rapeseed from Ukraine and Australia, as well as cottonseed from Australia.


However, global production and trade of protein meals are down, reduced mainly on Argentina soybean meal and India cottonseed meal.


Despite overall reduced crush, total oil production is little changed overall in part due to increased palm oil.


Oil trade is raised slightly on higher Turkey, Russia, and Ukraine sunflower-seed oil and Malaysia palm oil, partially offset by lower soybean-oil trade.


Global ending stocks of oilseeds, meal, and oil are all lowered notably. The projected U.S. season-average farm price for soybeans is unchanged at $14.30 per bushel.


Since USDA’s February World Agriculture Supply and Demand Estimates report, average soybean prices were slightly higher as crop conditions and export expectations in Argentina continued to deteriorate.


Soybean-meal prices surged for all exporters in February driven by crop concerns and declining crush in Argentina, leading to the highest Argentina soybean-meal prices in over 10 years.


Global meal supplies and prices may face volatility in the coming months depending on the uncertainty of Argentina harvest, policy and crush.


February soybean-oil export prices were lower than the previous month.


U.S. prices continued a downward trend from the announcement of lower-than-expected proposed biofuel targets by U.S. EPA in December coupled with higher imports of rapeseed oil from Canada for use as feedstock. However, U.S. prices remained significantly more expensive than South America.


The discount between soybean oil and palm oil narrowed as average palm-oil prices remained relatively unchanged in the face of slow exports from Indonesia and increased competition from sunflower-seed oil.


Going forward, soybean-oil prices are likely to moderate on increased competition from other vegetable oils and the harvest progress in Brazil.


Editor’s Note: Brazil’s National Council for Energy Policy (CNPE) approved a measure March 17 to increase the national biodiesel mandate from 10 percent to 12 percent beginning in April.

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