The United States Department of Agriculture’s (USDA) Foreign Agricultural Service released its July 2024 Oilseeds: World Markets and Trade report, shedding light on significant trends and shifts in the global oilseeds market.
Mexico's soybean meal imports surge
Mexico’s soybean meal imports are projected to rebound dramatically from the nine-year low seen in 2022/23, reaching over 2 million tons in 2024/25, the second highest total ever. The country's dependence on imported soybean meal is driven by limited domestic production and the need for livestock feed. In 2023/24, competitive prices for U.S.-supplied soybean meal have spurred strong import demand.
The previous decline in imports during 2022/23 was attributed to high soybean meal prices caused by a significant drought in Argentina, which reduced global supplies. As global soybean meal availability increased in 2023/24, prices fell, driving up demand in Mexico’s expanding livestock industry. Consequently, Mexico’s soybean meal imports are up by 24 percent, while soybean imports remain relatively flat.
Global market dynamics
The USDA has raised its forecast for China’s soybean imports by 3 million tons to a record 108 million for 2023/24. This increase is driven by falling soybean export prices, pressured by robust supplies from South America. Brazil and Argentina are expected to see higher export volumes, with Brazil's exports projected at 103 million tons and Argentina’s nearly 6 million tons for the October 2023 – September 2024 marketing year.
Despite the increase in South American exports, U.S. soybean exports to China have dropped by more than 20 percent compared to the previous year. With another large harvest in the Southern Hemisphere and competitive Brazilian prices, U.S. soybean exports may face continued competition.
Oilseeds production and trade forecast
For 2024/25, global oilseeds production is forecasted to increase to 686.1 million tons, largely due to greater rapeseed production in Canada and higher cottonseed and peanut yields in the U.S. Despite this, lower soybean production in the U.S. and reduced sunflowerseed production in Russia tempered the overall increase.
Global oilseed trade is projected to rise by 500,000 tons, driven by higher Canadian rapeseed exports. Ending stocks are forecast to be slightly higher, with increases in rapeseed, peanut, and sunflowerseed carryout offsetting lower soybean stocks. Global crush utilization is expected to decrease due to lower sunflowerseed usage.
Market prices and export trends
The projected U.S. season-average farm price for soybeans for 2024/25 is down 10 cents to $11.10 per bushel. For 2023/24, the price is adjusted down 5 cents to $12.50 per bushel.
In June, U.S. soybean prices were under pressure due to favorable weather conditions, which also led to a decline in soybean meal prices. However, U.S. soybean oil prices saw an uptick, bolstered by higher exports and a rally in Malaysian palm oil prices. In Brazil, a weaker real encouraged farmers to boost soybean sales, leading to increased exports to China.
