Global Oilseed Prices Fluctuate as Soybean Futures Hit New Highs!

As of the week ending November 29, 2024, global oilseed prices have been fluctuating, with Chicago soybean futures rebounding from recent lows, primarily due to record-high soybean export sales from the U.S. and continued purchases by China. However, threats of tariffs from Trump, uncertainty around U.S. biofuel policy, and favorable weather in South America have limited the price rebound.

On November 29, the CBOT January soybean futures closed at $9.8950 per bushel, up 0.61%. The average spot price for No. 1 yellow soybeans for December shipping was $10.7525 per bushel, up 0.9%. January soybean meal and soybean oil closed at $291.9 per short ton and 41.74 cents per pound, respectively, up 0.1% and down 0.2%. The February rapeseed futures on the Euronext and the January rapeseed futures in Canada closed at €507.75 per ton and CAD 574.10 per ton, down 0.2% and 3.1%. The FOB price for Argentine soybeans was $413 per ton, down 0.2%. The U.S. dollar index closed at 105.828 points, down 1.6%.

Despite Trump's tariff threats, Chinese state-owned buyers continue to purchase U.S. soybeans. Reports indicate that last week, Chinese state buyers purchased at least eight vessels of U.S. soybeans to replenish state reserves. Analysts had initially expected China to slow its purchases due to tariff war concerns.

Trump announced on his first day in office that he would impose a 25% tariff on goods from Canada and Mexico and a 10% tariff on Chinese goods. Nevertheless, Chinese buyers continued to procure U.S. soybeans this week. U.S. private exporters reported sales of 132,000 tons of soybeans to China and 991,700 tons to unknown destinations, all for delivery in the 2024/25 marketing year.

U.S. soybean export pace has accelerated, with weekly sales reaching an annual high. The USDA reported that as of the week ending November 21, U.S. soybean net sales were 2.49 million tons, a 34% increase from the previous week and 31% higher than the four-week average. Year-to-date, U.S. soybean sales to China total 15.81 million tons, down 6.9% year-on-year. Total U.S. soybean sales stand at 33.57 million tons, up 9.7% year-on-year. The USDA expects total exports to increase by 7.7% year-on-year.

U.S. soybean export shipments have reached a four-year high. The USDA's weekly export inspection report indicated that as of November 21, soybean export inspections totaled 2.1 million tons, exceeding 1 million tons for the fifth consecutive week—last seen in December 2020. Last week, 11 vessels loaded with 660,000 tons of soybeans headed to China. Analysts warn that the strong U.S. soybean export performance may be difficult to sustain as Brazil's soybean planting wraps up and production is expected to hit new highs.

Brazil's soybean planting is nearing completion, with rainfall boosting production prospects. The Brazilian National Supply Company (CONAB) reported that as of November 24, Brazil's soybean planting progress for the 2024/25 season stands at 83.3%. Consulting firm AgRural noted no major issues with the current planting pace or crop growth, though reduced rainfall in western Paraná and southern Mato Grosso should be monitored.

Forecasts for Brazil's soybean production outlook are optimistic, partly due to the absence of La Niña weather conditions. AgroConsult predicts Brazil's soybean output will reach a record 172.2 million tons, up from 155.5 million tons last year. CEO André Pessoa stated that normal weather conditions are favorable for increased yields. Brazil's soybean exports are expected to remain strong in 2025, with crushing volumes rising to 57 million tons. Pessoa mentioned that Brazil will begin harvesting soybeans in bulk from January 25 to February 15, but a shortage of drying facilities may pose a problem.

Argentina's agriculture ministry has raised its soybean planting area estimate to 17.9 million hectares. The monthly report indicated that the 2024/25 soybean planting area is expected to reach 17.9 million hectares, an increase of 100,000 hectares or 0.6% from earlier estimates, due to improved soil moisture conditions and expected reductions in late-season corn planting. The Rosario Grain Exchange has adjusted Argentina's soybean planting area to a six-year high of 17.9 million hectares, raising the yield forecast from 50 million tons to 53-53.5 million tons. The Buenos Aires Grain Exchange anticipates a soybean yield of 52 million tons, a year-on-year increase of about 3%.

Ukraine's oilseed harvest is nearing completion, with record soybean production. According to Ukraine’s agriculture ministry, as of November 28, sunflower harvest progress was at 97%, soybean harvest at 99%, and rapeseed harvest has concluded, with respective yields of 10.2 million tons, 6 million tons, and 3.5 million tons.

In 2025, the EU's rapeseed and sunflower crops are expected to rebound. Strategic Grains forecasts a significant rebound in the EU's rapeseed and sunflower production next year. The rapeseed yield for the 27 EU countries is expected to reach 18.7 million tons, a 12% increase from 2024. Sunflower yield is projected to be 10.5 million tons, a 25% increase from 2024.

Downside potential for soybean prices is limited, while upside potential is constrained by South American weather. With the U.S. soybean harvest complete and South American soybeans set to be harvested early next year, seasonal pressure is easing. If supported by South American weather or Chinese demand, soybean prices may experience a seasonal rebound, but this may be limited by record global soybean supplies and farmers speeding up pricing.