— This is the script of CNBC's news report on Soybean Futures for China's CCTV on March 10, 2023.
Recently, there have been fluctuations in the price of soybean futures in the global commodity market. From the supply side, this is related to the production of several major soybean exporting countries.
This chart shows the price trend of the May '23 futures contract for soybean on the Chicago Mercantile Exchange. It can be seen that starting from mid to late February, the price has fallen from its peak and has been fluctuating around $15 per bushel since March.
According to Statista, it is estimated that the top four major soybean exporting countries in the international market for the period from 2022 to 2023 will be Brazil, the United States, Paraguay, and Argentina.
In Brazil, the drought last year affected soybean harvests, leading to a decrease in production and exports. In the first two months of this year, heavy rains also kept Brazil's soybean exports at a low level.
Filip Gouveia, an analyst from the Baltic International Maritime Council (BIMCO) pointed out that Brazil's soybean harvest this year is expected to reach a new high, leading to significant increases in both production and exports, potentially becoming the main driving force behind global grain exports this year.
According to the forecast data released by CONAB, the National Supply Company under the Brazilian Ministry of Agriculture, for the period from 2022 to 2023, Brazil's soybean production is expected to reach approximately 150 million tons, an increase of over 20% compared to the previous year.
Gouveia also stated that Brazil's soybean exports are expected to grow by 19% in 2023, accounting for 55% of the world's total exports.
It is known that the soybean planting area in Brazil has been expanding for 16 consecutive years, with a significant increase in production capacity.
Therefore, some analysts suggest that there is a high possibility of soybean oversupply this year, and the situation of oversupply may continue until the middle of this year.
Another factor causing fluctuations in soybean futures prices is the recent downward revision of Argentina's soybean production expectations by the US Department of Agriculture.
Argentina is one of the major producers of soybeans globally and is also the largest exporter of soybean meal and soybean oil. The USDA's report indicates that dry and hot weather may affect crop growth in key areas of Argentina.
As a result, this year's soybean production expectation for Argentina has been revised down to 33 million tons, a 20% decrease compared to the expectation in February, and the lowest since 2009.
Additionally, the Rosario Grain Exchange in Argentina has made an even more pessimistic forecast, lowering the production estimate to 27 million tons.
Crops from South America are crucial for the world's feed reserves, so traders are closely monitoring the weather in the region. However, with the recovery of production in Paraguay and the news of Brazil's potential record-high production mentioned earlier, there may still be some fluctuations in soybean futures. We will keep a close eye on this matter.