Various factors putting pressure on soy prices

Photo: Canva
Photo: Canva

International prices for soybeans are under pressure. The International Grain Council (IGC) price index, a benchmark for the price of soybeans in the world, stood at 259 points on Monday, 25 September (year 2000 = index 100). That is 15% lower than the price index was a year ago.

The price for soy fell on the market early in September due to the depreciation of the US dollar against the Brazilian real. That made Brazilian soy more expensive to sell on the world market. Demand from abroad therefore decreased.

Brazilian soy growers optimistic

Brazilian soy growers are optimistic about this season. It is on the dry side, which may delay the current sowing work. There are also concerns about the influence of El Niño in the longer term. The drought that this weather phenomenon entails can cause disappointing yields in a large part of Brazil.

For the time being, the US Department of Agriculture (USDA) expects a Brazilian soy yield of 163 million tonnes. For comparison, in the 2022-23 season the country produced 156 million tonnes. The Brazilian agricultural agency Conab assumes 162.4 million tonnes of soy for the 2023-24 season. In Argentina, a yield of 48 million tonnes is expected due to favourable weather. In the 2022-23 season, 20 million tonnes of soybeans came from the country.

Americans expect poor soy harvest

Harvest is currently taking place in the US. Early this week, the international price for soybeans rose slightly, as rainfall slightly slowed the US harvest. American growers expect the worst harvest in 10 years. The latest crop figures show that around 24 September, 50% of the soybeans were in ‘good to excellent’ condition. A week earlier this was still 52% and a year earlier around the same reference date, 55% of the soybeans were in ‘good to excellent’ condition.