Drought and Uncertainty Lead to Reduced Argentine 

Soybean Crush

Argentina’s soybean crush declined in response to the 2012 drought and is now mired near levels last seen in 2009, when a more significant drought occurred.

While a smaller harvest accountsfor most of the decline, market uncertainty over the past few months encouraged producers to retain a larger share of last season’s crop. Crushers are also facing competitive pressures that have reduced demand for meal and oil, including oil used in biodiesel. Concerns that retroactive duties may be applied on EU biodiesel imports have caused Argentina’s biodiesel exports to drop by 50 percent since September.

With an improved harvest just months away, crush is forecast to rebound along historic trends, although the influence of non-supply factors will likely continue through 2013.

OVERVIEW

Global soybean production is lowered due to a reduction in Argentina. Global trade is marginally up with a slight increase in the EU and Paraguay. World imports for soybean meal and oil are down.

The season-average U.S. farm price remains unchanged. 

SOYBEAN PRICES 

U.S. export bids, FOB Gulf, in February averaged $571 per ton, up slightly but virtually the same level from the previous month. Prices are supported by continued strong foreign demand, as buyers look to the U.S. as exportable supplies in Brazil face logistical challenges resulting in shipping delays. 

As of the week-ending February 28, U.S. soybean commitments (outstanding sales plus accumulated exports) to China totaled 21.3 million tons, compared to 20.0 million a year ago. Total commitments to the world are 35.0 million tons, compared to 29.9 million for the same period last year. 

2012/13 TRADE OUTLOOK

• U.S. exports of soybeans and oil are unchanged. 

• Argentina’s soybean meal exports are down 1.0 million tons to 27.0 million on reduced crush impacted by a smaller crop. 

• China’s soybean meal exports are up 100,000 tons to 1.2 million stimulated by reduced competition from Argentina in key Asian markets. 

• EU soybean imports are up 300,000 tons to 11.6 million to reflect large purchases from the United States, while soybean meal imports are cut 700,000 tons to 20.5 million on a slower pace. 

• Japan’s rapeseed imports are raised 300,000 tons to 2.3 million to reflect continued strong demand for crush. 

• Malaysia’s palm oil exports are raised 425,000 tons to 17.2 million with strong demand in countries including China, India, the EU, and Egypt. 

• Ukraine’s sunflowerseed meal exports are boosted 200,000 tons to 3.6 million on strong sales to the EU