Continuing drought causes soybean prices to rise

28-06-2023 | |
Photo: Canva
Photo: Canva

In the United States, the quality of soybeans have received a lower rating. The US Department of Agriculture (USDA) indicated that 51% of soybeans are in “good to excellent” condition at the June 25 reference date. A week earlier that was still 54%. It has been very dry for a long time in key US production regions, which has caused prices to rise in recent weeks.

The US sells a large share of soybeans to the world market. In the 2022-2023 season, sales of soybeans were disappointing due to lower production and higher domestic demand. US production was then 116.3 million tons of soybeans, of which 54.4 million tons were sold on the world market. For the 2023-2024 season, a harvest of 122.7 million tons is expected with an export of 53.7 million tons. Weather conditions in the United States are being closely monitored, because soybeans will be in the flowering phase in the coming period.

China more active on the market

Soybean prices rose because China is more active in the market. China bought more soybeans in the past month in Brazil, the US, Argentina and Uruguay, among others. The United Nations Joint Coordination Centre previously reported that about a quarter of all oilseed and grain volumes shipped under the Black Sea Initiative were destined for China. This makes China the most important importer of food and feed.

Rapeseed prices falling

Rapeseed prices fell last week due to the disappointment over the biofuels mandate for the next few years, announced by the US Environmental Protection Agency (EPA). The US government plans to increase the amount of biofuels that oil refineries must blend into the country’s biofuel mix over the next 3 years. For ethanol, however, the plan contains lower mandates. This caused consternation in the biofuel industry. Earlier this week, quotes moved higher supported by increases in other oilseed prices.

Annet Smale Editor Feed Markets