CoBank says a sharp decline in global demand has pressured prices down for United State’s.soybeans.
International buyers remain discouraged by a strong dollar, slowing economic growth and uncertainty over the direction of U.S. trade policy in an election year, it wrote in its recent market analysis.
Export sales of new-crop soybeans are usually low as harvest begins but CoBank thinks things might get better later on.
on.however, several tailwinds could emerge to rejuvenate
Tanner Ehmke, lead grain and oilseed economist for CoBank. Said a smaller-than-expected South American soybean harvest, a bump in European demand for soybeans from non-deforested acreage, falling interest rates in the U.S., and a recovery of the Chinese economy could all fuel increased export demand.
The U.S. Department of Agriculture is forecasting a record Brazilian soybean crop, however, low prices may discourage Brazilian farmers from expanding soybean acreage as planting begins in the coming weeks.
La Niña to also expected to emerge this September, which could negatively impact Brazilian soybean yields.
New European demand for U.S. soybeans is also expected to emerge when rules surrounding imports and deforestation take effect. Beginning Dec. 30, 2024, new imports into the EU must be certified to have come from land that was not deforested in the past decade.
(I say those European market protectionists will seize on any issue to stifle imports.)
That gives soybeans from the U.S. and Canada an advantage over South American soybeans in the European market.
An economic recovery in China could lead to an acceleration of soybean purchases. The Chinese government is expected to aggressively lower interest rates in an attempt to stimulate the country’s sagging economy.
That could increase consumer demand for meat in China which would require more soybeans and soybean meal.
As the U.S. cuts interest rates, its soybean prices will gain some edge over Brazil.
