Soybeans: the season will be good despite lower forecasts

Audio 01:40

World oilseed production for the next season (2021/2022) is revised downwards, with 1.1 million tonnes less than expected, or 384 million tonnes estimated.

© Getty Images / AFP /

By: Marie-Pierre Olphand Follow

2 min

The next global soybean harvest could be lower than expected.

But they remain high, which should protect soybeans from the surge in grain prices.

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Along with corn, soy is one of the key materials for animal feed.

Harvest forecasts are therefore being closely monitored.

And any variation in production estimates can cause the market to jump.

That's what happened this week.

The expected trend has been contradicted by the US Department of Agriculture whose statistics refer to: world oilseed production for the next season (2021/2022) is revised downwards, with 1.1 million tonnes less than expected, or 384 million tonnes estimated.

Decrease announced in Argentina and the United States

The poor performers are Argentina where sowing intentions, and therefore areas are down, but also the United States, where yields are expected to be less good than last year in several states.

American production could fall by 600,000 tonnes.

But in the end, " 

 ", specifies Sebastien Poncelet director of development of the analysis firm Agritel, with a harvest which should be higher than last year, barely below the record of 2018, and higher than that of 2020. As US exports have also been revised downwards, US stocks are in the process of being rebuilt.

Brazil and China are now guiding prices

Despite a surge in prices, the soybean market is therefore much more balanced than that of cereals, prices rise less high and less quickly, explains our interlocutor.

This is particularly because year after year, with some exceptions, Brazil is increasing its production areas.

This Brazilian capacity to increase supply is one of the factors for price stability today.

The other is Chinese demand.

Because the Middle Kingdom, which is rebuilding its pig herd, makes two-thirds of the world's soybean purchases for its livestock feed.

However, Chinese orders fell 41% in October, their weakest month since March 2020, according to a note from Commerzbank.

If this slowdown is confirmed, then prices could level off in the coming months and make soybeans a little more competitive on the market.

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