Soybean prices, like those of most other oilseeds and grains, have risen dramatically since August 2020.
‘Why has the market given so much attention to South American soybean production? Over the last 12 years, Brazil has overtaken the United States as the number one soybean producer. Argentina’s soybean production has also increased,’ explains Neil Blue, provincial crops market analyst with Alberta Agriculture and Forestry.
‘The South American soybean crop has encountered weather challenges during the last few months, but harvest is now well underway.’
Image 1. Bar chart of soybean production comparing Brazil, United States and Argentina
Blue points out that huge demand for oilseeds and grains by China has been a major market-driving factor. China is the largest volume soybean importer in the world market, importing over 100 million tonnes of soybeans a year and accounting for 60% of world soybean imports. China also produces about 19 million tonnes of soybeans a year.
‘U.S. soybean exports have been very strong at just past the half way mark of this crop year. With high prices stimulating 2021 U.S. soybean acreage, it is quite possible that the U.S. will also produce a record soybean crop.’
Despite a large South American soybean crop and a potentially record large United States soybean crop, soybean demand is expected to remain strong during the next year. Even with the large crops projected, United States soybean carryover, while tight this crop year, is forecast to remain tight next crop year as well.
Image 2. Bar chart of United States soybean ending stocks
‘Oilseed markets will continue to be sensitive to weather forecasts, weather events and export announcements throughout the next year,’ explains Blue.Source : alberta