The global soybean market is poised for significant shifts over the next six months, influenced by record production levels, changing consumption patterns, and evolving trade dynamics.
Production Trends
Brazil is expected to achieve a record soybean harvest of 169 million tonnes in the 2024/25 season, driven by expanded acreage and favourable growing conditions.
The United States anticipates a 7% increase in soybean production, reaching 121 million tonnes, despite some early-season planting delays and weather-related challenges.
Argentina’s production is forecasted to rise to 51 million tonnes, marking its highest output since the 2018/19 season.
Consumption Patterns
China, the world’s largest soybean importer, is projected to reduce its purchases due to an economic slowdown and a declining pig herd, which diminishes feed demand.
The European Union is reviewing restrictions on U.S. soybean imports over pesticide concerns, potentially increasing demand for Brazilian and Argentine soybeans.
In the United States, domestic soybean crush is expected to reach a record 2.43 billion bushels, driven by strong demand for soybean meal and oil, particularly from the biofuel sector.
Weather Impacts
Early-season conditions for U.S. soybeans have been suboptimal, with reports indicating the worst start in at least five years due to planting delays and replanting needs in key states.
In Brazil, while overall production is robust, dry conditions in the south and heavy rains in central regions may affect yields and harvest timelines.
Trade Dynamics
The ongoing U.S.–China trade tensions have led China to impose a 125% tariff on U.S. soybeans, significantly reducing American exports to the Chinese market.
Brazil has capitalised on this shift, now supplying over 70% of China’s soybean imports and expecting to export up to 110 million tonnes in 2025.
The European Union’s potential restrictions on U.S. soybeans could further alter trade flows, benefiting South American exporters.
Price Outlook
Global soybean prices have declined by 25% over the past year, influenced by ample supply and subdued demand.
The U.S. season-average soybean price for 2024/25 is forecasted at $11.20 per bushel, down from $12.55 in the previous year.
Brazil’s biodiesel mandate, increasing the blend from 14% to 15% in 2025, may provide some support to soybean oil prices, given that soy oil constitutes 70% of Brazil’s biodiesel feedstock.
Summary
The soybean market is navigating a complex landscape of record production, shifting consumption, and geopolitical tensions.
While supply remains abundant, demand uncertainties and trade disruptions pose challenges.
Stakeholders should monitor weather developments, policy changes, and global economic indicators to adapt to the evolving market conditions.