Soybean price supported in the short term

Photo: Canva
Photo: Canva

The IGC price index, a measure of the price of soybeans in the world, stood at 274 points on Monday, 10 September (year 2000 = index 100). That is 9% lower than the price index was a year ago. Since the price dip at the end of May (246 points), the price index for soybeans has been at a higher level.

Short-term expectations

Dry conditions in the US will push down soybean crop estimates. Progress reports on US soybean conditions have been worse than expected in recent weeks. The condition of soybeans is worse than in previous years. Partly because of this, soy prices are supported in the short term.

Long-term expectations

In the longer term, large harvests are expected in South American countries. Brazil will start sowing soybeans at the end of this month or early October. If those returns turn out well, it could put pressure on prices. On the other hand, dry weather is expected due to the El NiƱo weather phenomenon, which could affect harvests in much of Brazil.

Strong demand from China

On the international stage, demand from China for soybeans remains strong and that also stimulates prices. China imported 9.4 tonnes of soybeans in August, which is an increase of 31% compared to a year earlier. China has benefited from cheaper soybeans after Brazil’s record 2022-23 crop, which continues to be offered on the market.

Rapeseeds

For rapeseed, it is expected that prices will follow the soybean market in the short term. In the longer term, the market is well supplied.

*A new Wasde report from the US Department of Agriculture was released on 12 September (European time), issuing new production forecasts for soybean crops.

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