South American soybean meal prices at four-year lows

03-Dec-2024 01:26 PM

South American soybean meal prices at four-year lows
The decline in South American soybean meal prices to their lowest levels in four years highlights a combination of increased production and strong processing activity. Here are key points driving this trend:

Production Surge:

Argentina and Brazil, the leading global soybean meal exporters, have ramped up production significantly. Argentina is expected to produce 49.5 million tons, while Brazil's production is projected at 16.6 million tons this year.
Brazil's soybean crushing reached record highs, with a projected total of 55 million tons by December 2023.
Strong Crushing Activity:

Argentina’s crushing for the year is forecasted at 42 million tons, a sharp 45% increase compared to the previous year.
Price Decline:

FOB Paranagua soybean meal in Brazil dropped to $322.42/ton, and Argentina’s FOB up river price fell to $320.77/ton on November 14. These are the lowest spot prices since mid-2020.
Premiums over the Chicago Board of Trade (CBOT) prices have also plummeted. For instance, Argentina's premium dropped from $38/ton to $4/ton, and Brazil’s declined from $27/ton to $5.50/ton within a year.
Impact on Indian Exports:

Lower South American prices are undercutting Indian soymeal exports, as Indian products are typically priced higher.
The overall price slump reflects robust supply, strong crushing activity, and reduced international demand pressures, creating a competitive environment for exporters globally.