In Friday’s session, SOY futures were worth 1466dollars/bushel (+2.65%), continuing the rise started from 1270dollars/bushel at the beginning of June (+15% in just two weeks). The current rise is aimed at reaching 1500/1510 dollars/bushel (after 1605 dollars). From 2000 to today, soy has twice touched 1770/1785 dollars (multi-annual double maximum) and the prices are therefore in the upper part of the fluctuation range and upon reaching 1500/1600 dollars we will be able to see profit taking. Focus on the weekly support at 1250 dollars (it supports the bullish trend; if violated it would trigger retreats towards the 1000/900 dollar area).
Brazil ranks first in soybean production with 114.27 million tons (34% of world production), followed by the United States of America (96.79 million tons, Argentina (55.26 million tons), China (15.73 million tons) and India (13.27 million tons). In Europe, Italy is the leading soybean producer (Istat data 2022), a seed that fits very well into the crop diversifications of our agriculture. Europe has a high deficit of this type of crop and even imports from non-EU countries (Brazil, Argentina and the USA) as much as 75% of the total requirement of oilseed flours (mainly soybeans) used substantially in the zootechnical sector.
China and the European Commission
For this reason, the European Commission recently decided to revise its plant protein policy and is expected to publish a new forward-looking report in the first quarter of 2024. China is by far the largest importer of soybeans with over 60% of global trade going mainly to crushing for feed production. The United States and Brazil supply over 80% of China’s soybean imports.
In 2022, China imported 54.39 million tons from Brazil and 29.5 million tons from the United States. A recent article in Successful Farming noted that “competition from South America will slow down US corn and soybean exports during the summer, according to a forecast by the Department of Agriculture in its monthly WASDE report. USDA analysts said soybean exports are now about 1% lower than estimated a month ago, based on a slowdown in shipments this spring.
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