It is expected that the demand for soybean meal will remain high throughout the next season, while global stocks of the product are likely to remain limited. This, in turn, keeps prices at a high level and contributes to the acceleration of soy processing margins in the US in recent weeks, according to analysts.

The reduction in global supplies and export difficulties for Ukrainian meal, exacerbated by the closure of the grain corridor, have provided underlying support to the meal markets, as noted in CRM Agri’s report on the oilseed market.

Despite the rise in soybean oil prices, the share of oil prices remained relatively stable at around 80%, leading to a sharp increase in processing margins for soybeans into meal and oil. This surge highlights the tension in the global food markets, British analysts reported.

US Soybean Market

Estimates for global soybean production for 2022/23 and 2023/24 have been revised downward by the US Department of Agriculture (USDA) in recent weeks, mainly due to reduced production in the US and Argentina.

As a result, the production of soybean meal for the 2023/24 season has been revised downward by one million tons to 259 million tons in July.

As for the prospects of soybeans in the US, concerns about crop conditions are growing. Similar to corn, planting conditions in the US were poor and are currently at multi-year lows, they noted.

“In combination with revised downward estimates of acreage and assessments of poor condition, US yield estimates are likely to be reduced again, leading to further reductions in physical supply for the remaining part of 2023 and early 2024.”

“Export sales for the new crop in the US remain the lowest since 2019, and there are few signs of a seasonal increase in demand.”

Even though slow export sales in the US have weakened the oilseed market, this trend is likely to change this month, according to analysts.

“Amid concerns about the potential size of the US crop and rising vegetable oil prices, US soy markets have the potential for further growth.”