Soybean Prices Fall on Rising South American Production

Soybean prices declined in March in response to rising projections for the 2017 South American harvest. November futures prices on the Chicago Board of Trade (CBOT) fell 7.5 percent, ending the month below $10/bu for the first time since mid-January. Cash prices quoted for Central Illinois fell 10 percent in March with continued price erosion into early April. Cash prices are flirting with $9.00/bu, the lowest they have been since early April 2016. This is a far cry from last year when late-season dryness in Brazil reduced yields and flooding rains in Argentina cut harvested area leading to a run-up in cash soybean prices that touched $11.50/bu in early June 2016.

Compounding the downward pressure on prices in March was the release of USDA’s Prospective Plantings report on March 31. This report showed additional soybean plantings in the United States for 2017, pushing prospective U.S. acreage further into record territory. Using the trend yield reported in the February USDA Outlook Forum, 2017 production could approach last year’s record volume and possibly add to global soybean stocks.

Current price levels have flattened as the potential for further production gains in South America have likely been factored into the November futures price. Since the end of March, November futures have remained near $9.50/bu while the Central Illinois Cash Price has remained near $9.05/bu. Over the next few months, the market’s attention will likely turn away from South American production and toward demand factors and U.S. planting progress. Both February and March exports from Brazil reached record levels and U.S. sales remain strong into the latter half of the marketing year. With prices at their lowest level in 12 months, any signs of increased buyer interest or weather issues negatively impacting the U.S. crop could boost both futures and cash prices.

Pakistan: Early season rapeseed imports lead to slowing soybean demand

With a growing economy and expanding poultry industry, Pakistan was expected to see a large jump in soybean imports in 2016/17. Early season trade trends, however, suggest a different situation.

Trade data for the first quarter of 2016/17 suggests that the pace of soybean imports is similar to, if not slightly outpacing that of last year. In contrast, rapeseed imports, primarily from Canada, have shown significant growth over the past 12 months ending in February 2017. Canada rapeseed has provided some relief to the domestic crushing industry, simultaneously satiating the strong demands for vegetable oil in the domestic market. Given rapeseed’s higher oil yield, imports of Canadian rapeseed have temporarily dampened the need for soybean imports, but increased the demand for soybean, sunflower and palm kernel meals to compensate for the lower protein meal output. These developments seem to have slowed soybean imports in the early months of the marketing year, while supporting other protein meal imports.

Going forward, the large South American soybean crop is pressuring prices and has the potential to spur additional soybean purchases by Pakistan. However, it is unlikely that soybean trade will be large enough to boost imports over the levels of 2015/16, as thought during the initial forecast. Considering all factors, USDA has lowered the soybean import estimates for Pakistan to 1.35 million tons, a robust 8% growth over 2015/16.


Global oilseed production is forecast higher this month. Soybean production is up for Brazil, Argentina, Paraguay, and Uruguay. Rapeseed production is adjusted higher for India and sunflowerseed crop projection is up in Russia and South Africa. Global soybean exports are projected higher this month on larger shipments from Brazil, Paraguay, and Uruguay. Imports are forecast higher this month as stronger demand from China, the European Union, Japan, and Thailand more than offsets reductions for Pakistan and Taiwan. Global soybean stocks are up this month, led by Brazil, Argentina, and China. The U.S. season-average farm price is down $0.05 to $9.55 per bushel.


U.S. export bids in March, FOB Gulf, averaged $380/ton, down $21 from last month. FOB Brazil Paranagua averaged $381/ton, down $21 from last month. FOB Argentina Up River averaged $374, down $23 from last month. The downtrend in price reflects growing supply pressure with soybean production estimates climbing in Brazil, Argentina, and other South American producers. Additionally, soybean prices are pressured from expectations of a further sizable increase of U.S. soybean plantings in 2017.

For the week ending March 30, U.S. 2016/17 soybean export commitments (outstanding sales plus accumulated exports) to China totaled 35.2 million tons compared to 26.8 million a year ago. Total commitments to the world are 55.2 million tons, compared to 44.3 million for the same period last year.


  • United States soybean meal exports are raised 272,000 tons to 10.8 million reflecting a stronger pace of trade.
  • Argentina soybean imports are up 200,000 tons to 1.2 million with boosted availability from Paraguay. Soybean meal exports are down 400,000 tons to 32.0 million in response to reduced import demand by the EU. Soybean oil exports are lowered 100,000 tons to 5.6 million on slow growth of global demand.
  • Australia rapeseed exports are raised 100,000 tons to 3.2 million on greater supplies from higher carry-over from 2016.
  • Brazil soybean imports are boosted 150,000 tons to 500,000 with increased availability from Paraguay. Soybean exports are raised 900,000 tons to 61.9 million on larger supplies resulting from improved yield projections.
  • China
    • Soybean imports are boosted 1.0 million tons to 88.0 million on expected higher purchases following last month’s decline in global prices.
    • Soybean meal exports are lowered 300,000 tons to 1.6 million on strengthened competition from other suppliers.
    • Rapeseed meal imports are up 100,000 tons to 400,000 on a stronger pace of purchases from Canada.
  • Egypt palm oil imports are reduced 150,000 tons to 1.4 million reflecting the weaker pace of trade due to devaluation of the Egyptian currency slowing down imports.
  • European Union
    • Soybean imports are raised 800,000 tons to 14.6 million reflecting growing soybean oil consumption for food use.
    • Soybean meal imports are cut 750,000 tons to 19.5 million on a weaker pace of trade and a surge in soybean imports.
    • Rapeseed imports are up 100,000 tons to 3.8 million on stronger crush and ample exportable supplies in Australia.
  • Guatemala palm oil exports are raised 215,000 tons to 700,000 on trade trends following revisions to production.
  • India
    • Palm oil imports are lowered 400,000 tons to 9.2 million on slowing demand for vegetable oils.
    • Soybean meal exports are reduced 300,000 tons to 1.5 million on growing domestic demand of protein meal and reduced demand from regional buyers.
    • Peanut exports are up 100,000 tons to 1.0 million on stronger global demand for food use consumption.
    • Sunflowerseed meal imports are raised 120,000 to 300,000 on higher demand following lower export prices in Ukraine.
  • Indonesia
    • Palm oil exports plummet 700,000 tons to 25.0 million on lower production forecast.
    • Palm kernel meal exports are cut 200,000 tons to 4.1 million on reduced palm kernel production and crush projection.
    • Palm kernel oil exports are down 100,000 tons to 1.6 million reflecting reduced crush.
  • Japan
    • Soybean imports are up 100,000 tons to 3.2 million on trade trends and strong demand for soybean oil.
    • Palm kernel meal imports are up 791,000 tons to 800,000 on reclassification of palm kernel hulls used for biomass.
  • Malaysia palm kernel oil imports are slashed 100,000 tons to 200,000 and palm kernel oil exports are cut 100,000 tons to 960,000 on historical revision of extraction rates and production.
  • New Zealand palm kernel meal imports are down 950,000 tons to 1.6 million in line with the reduction in the previous year following reduced demand and cost-cutting measures of the dairy industry.
  • Pakistan
    • Soybean imports are decreased 400,000 tons to 1.4 million and soybean meal imports are increased 200,000 tons to 700,000 on slower trade trends and overall supply levels of oilseed products.
    • Rapeseed imports are up 300,000 tons to 1.1 million on stronger imports from Canada.
  • Paraguay soybean exports are raised 800,000 tons to 6.2 million on a larger production forecast.
  • Philippines copra meal exports are cut 100,000 tons to 350,000 on reduced supply.
  • Russia soybean imports are up 150,000 tons to 2.3 million reflecting larger shipments from Brazil and Paraguay. Soybean meal imports are slashed 230,000 tons to 220,000 on a weaker pace of trade and larger soybean imports.
  • Senegal peanut exports are cut 100,000 tons to 250,000 on expected lower purchases by China, and by Vietnam’s suspension due to a pest issue.
  • Taiwan soybean imports are lowered 150,000 tons to 2.5 million, following updated data on crush activity and soybean meal production.
  • United Arab Emirates rapeseed imports are raised 150,000 tons to 750,000 in response to the strong pace of early season trade.
  • Uruguay soybean exports are boosted 500,000 tons to 3.0 million on a larger crop.
  • Vietnam soybean meal exports are reduced 100,000 tons to 200,000 due to lower carry-over.