During the second week of October, the soy market in Chicago experienced significant price fluctuations that had direct consequences for farmers and investors. The Central for International Economics and Agricultural Market Studies (CEEMA) conducted market research and found that Chicago soy futures prices had been fluctuating wildly throughout the week. On November 11th, the price of a bushel dropped significantly to $12.52 USD. However, there was a sharp spike in soybean prices on October 12th in response to the release of the USDA’s updated supply and demand report, reaching US$12.90 per bushel, an increase from US$12.80 the previous week.
The USDA’s report showed bullish expectations for the soy market, as it reduced the final U.S. production estimate by an additional million metric tons to 111.7 million. The United States maintained its final reserves for the 2023/24 crop year at 6 million metric tons. Globally, the output was estimated at 399.5 million tons, with final global stocks falling to 115.6 million tons, a decrease of almost four million tons compared to September. Brazil’s production remained steady at 163 million tons per year, while Argentina’s output remained at 48 million tons. China’s soy imports showed no change from the previous year’s level of 100 million tons. U.S. farmers paid an average price of $12.90 for a bushel of soy, which remained unchanged from September but lower than the predicted $14.20 for 2022/23.
The CEEMA report also highlighted the state of soy harvest in the United States during October. The harvested area represented 43% of the total, which is higher than the historical average of 37%. The condition of the soy crops ranged from 51% in good to excellent condition, 31% in regular condition, and 18% in poor to very poor condition.
China, as one of the major players in soybean imports, reported a decrease in the volume of soy products it imported in September. The imports were 7.15 million metric tons, down by 7.3% compared to the same month the previous year. This decline was attributed to the high stockpiles in China and the recent rise in international prices for soybeans. However, with a record harvest in Brazil resulting in reduced prices, there was an increase in demand for Brazilian soy in China. According to customs data, total Chinese soy imports grew by 14.4% year-over-year to 77.8 million metric tons in the first nine months of the year.
These recent events have had a significant impact on the soy market in Chicago. The price fluctuations and the USDA’s report have influenced both farmers and investors. The decrease in U.S. production and global stocks, along with stable production in Brazil and Argentina, have created an environment where demand may outpace supply. Additionally, China’s fluctuating soy imports have added another layer of uncertainty to the market. It is essential for farmers and investors to closely monitor these factors and make informed decisions to navigate the volatility of the soy market.