On August 17, the “2023 Soybean Industry Annual Conference and the 7th China Soybean Industry International Summit Forum” was held in Harbin, Heilongjiang Province. At this forum, Wang Liaowei, deputy director of the Market Monitoring Division of the National Grain and Oils Information Center, gave a speech on the theme of “2023/2024 Global Soybean Supply, Demand and Price Outlook”.
“The increase in Brazil’s soybean exports will alleviate the impact of the lower-than-expected increase in U.S. soybean production. Domestic soybean production will remain high, and the mismatch between supply and demand may keep prices under pressure. The market expects that the price will be around the cost of planting, and the future trend will depend on it.” State reserves and consumption.” Wang Liaowei said.
Brazil’s soybean export increase will alleviate the impact of the US soybean production increase less than expected
Wang Liaowei introduced that from the perspective of the global oil and soybean supply pattern, the supply of large oil plants in the northern and southern hemispheres presents a seasonal complementary trend. The supply of oilseeds in the northern hemisphere accounts for about 60% of the global total, while that in the southern hemisphere accounts for about 40%.
From the perspective of the layout of global soybean production and trade in 2023/2024, 70% of the global soybean planting area, 80% of production, and 90% of trade volume are concentrated in Brazil, the United States and Argentina.
According to the US Department of Agriculture’s planted area report data, the US soybean planted area in 2023 will be 83.5 million acres, a decrease of 5% from last year, and it is also lower than the 87.5 million acres of planted area in March. Analysts had expected the U.S. soybean acreage to be 87.673 million acres on average. USDA maintained its August forecast of 83.5 million acres.
According to data from the research and consulting agency CHS, as of August 11, Brazil’s 2022/2023 soybean sales progress was 72%, which was lower than 80% in the same period last year. There are nearly 45 million tons of soybeans left in the hands of Brazilian farmers, an increase of about 17 million tons compared with the same period last year. Even considering the impact of Argentina’s production reduction on South American soybean exports, the soybeans available for export in South America will increase by about 6 million tons compared with the previous year. In terms of months, it is estimated that the export volume of soybeans from September to December will exceed 15 million tons.
The increase in Brazilian soybean exports will alleviate the impact of the lower-than-expected increase in US soybean production. In 2023/2024, Brazil’s soybean production will reach a record 163 million tons, and its export volume will also reach 96.5 million tons. The ending inventory will rise to 40.8 million tons, and the pressure on the supply side will intensify.
Argentina’s soybean production is expected to drop again and again, almost cut in half, and the final output is expected to be around 20 million tons to 21 million tons. Argentine soybean imports are expected to reach 10 million tons in 2022/2023. Argentina has become a net importer of soybeans, and there is still room for further increase in imports, and the decline in crushing will affect the export capacity of soybean oil and soybean meal. However, in the 2023/2024 season, Argentine soybeans will experience a recovery increase, and the output is expected to reach 48 million tons. The increase in the export capacity of soybeans and their products will drive global supply.
It is expected that the total domestic soybean production will hit a record high in 2023
2022 will be the first year for large-scale demonstration and promotion of soybean and corn strip planting in my country, with an area of more than 15 million mu. A number of suitable varieties have been initially selected, a number of technical models have been integrated, a number of special machines have been equipped, and a number of cultivators have been cultivated. A group of planting experts, most of the fields achieved the goal of “basically no reduction in corn production, and one more season of beans”, and successfully completed the demonstration task. It is expected that the promotion area will increase by 5 million mu in 2023.
According to Wang Liaowei, it is estimated that in 2023, the sown area of soybeans nationwide will be 10.42 million hectares, an increase of 177,000 hectares (2.655 million mu) year-on-year. Other provinces will also have a small increase.
It is estimated that the national soybean yield in 2023 will be 2.015 tons per hectare, a year-on-year increase of 1.8%; the total output is expected to be 21 million tons, a year-on-year increase of 3.5%, setting a record high.
Heilongjiang Province is currently the largest major soybean producing area in my country. The soybean planting area accounts for more than 40% of the country all year round, and the commodity rate exceeds 80%. In 2023, Heilongjiang will continue to implement a differentiated subsidy policy for corn and soybeans. The original subsidy for soybean producers will reach more than 350 yuan per mu. At the same time, Heilongjiang Province has further expanded the pilot area of the cultivated land rotation system, and the rotation of rice and beans is the main one. The agricultural socialization service project focuses on planting soybeans and fully supports soybean production.
Lu Wencheng, deputy director of the Heihe Branch of the Heilongjiang Academy of Agricultural Sciences, said in an interview with a reporter from the Securities Times that domestic non-GMO soybeans have a relatively high protein content and are mainly used for food processing to meet food demand. Soybeans imported from the United States, Brazil and other countries have a relatively high oil yield and are mainly used to produce edible oil and soybean meal for feed. The main uses of domestic soybeans and imported soybeans are different, and differentiated competition is required. It is expected that a large amount of soybeans will be imported from abroad in the future.
Wang Liaowei said in his speech on August 17 that as of June, my country imported 74.62 million tons of soybeans to Hong Kong in 2022/2023 (10/9), a year-on-year increase of 5.78 million tons. The reduction in imports in the early stage was mainly due to the high price of US soybeans Superimposed poor demand in my country. After the launch of South American soybeans, the price of new Brazilian soybeans was low, my country’s demand improved, and imported soybeans increased.
In addition, changes in customs policies from March to April delayed the arrival of soybeans in Hong Kong. In May, my country imported 12.02 million tons of soybeans, an increase of 2.346 million tons year-on-year, a record high in a single month, and imported 10.27 million tons in June. It is estimated that the total soybean imports in 2022/2023 will exceed 98 million tons, an increase of 6.39 million tons year-on-year.
The oil market may continue to fluctuate and adjust
Wang Liaowei made a summary from both international and domestic perspectives. In the international market, the inventory of old crop soybeans in the United States is tight, and the market hopes for a high yield of new crops, but the area of new crops is lower than expected, and the yield per unit area has become the focus of the market. In July, high temperature and drought continued in the U.S. soybean producing areas, and the good and good rate of U.S. soybeans continued to decline; in early August, the weather improved, and the good and good rate of U.S. soybeans surpassed that of the previous year for the first time. It is expected that the yield per unit area of new crop U.S. soybeans is likely to be around 51.5 bushels/acre, and the inventory of new crop U.S. soybeans has improved slightly, but the increase compared with the old crop is limited.
Brazil’s old crop sales progress is slow, and there are more surplus grains available for export, which will help alleviate the impact of the US soybean production increase on the market. Whether the substantial increase in global soybean production in the new year will be realized will mainly depend on South America. South American soybeans will start to be planted in September, and the market focus will gradually turn to South America.
In terms of the domestic soybean market, domestic soybean production will remain high, and the mismatch between supply and demand may keep prices under pressure. The market expects that the opening price may be close to the planting cost, and the future trend will depend on the state reserves and consumption. It is worth noting that the high cost of imported soybeans may bring opportunities for domestic soybean crushing.
“Judging from the current situation, there are still more imported soybeans arriving in Hong Kong, and the overall domestic supply is expected to be larger. We need to pay attention to the periodic supply and demand changes brought about by customs clearance and the pace of entering the factory.” Wang Liaowei said that overall, the supply of vegetable oil is abundant. The oil market will continue to fluctuate and adjust, and will continue to look for new driving factors.
2023-08-17 09:56:00
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