Soybean is losing its leadership — ASAP Agri

The publication of the USDA hasn’t introduced significant changes in the soybean global balance. Despite World and US remained unchanged, futures have declined after the issue of the report and are continuing to evolve in negative territory since the beginning of the week. For November delivery, prices are now displayed below 10.00$, Olivier Bouillet, the Head of Analytics & Insights at ASAP Agri told Latifundist.com.

He explains that it looks like operators are paying more and more attention to the large build-up of stocks to be recorded during this campaign from 112.3 to 134.6 MMT, globally. It must be highlighted that essentially key exporters will be responsible for this increase in stocks, Brazil with +5.9 MMT, the US with +5.6 MMT and Argentina with 4.8 MMT.

"Consequently, soybean is losing its leadership in the agriculture commodity market. The price ratio Soybean/Corn is indeed progressively falling towards what is considered as its average value of 2.2. Grains markets are then losing the support of the oilseeds sector," the analyst says.

In the short-term, it shouldn’t be excluded that further drop in soybean prices may be even towards 9.54$/bu, the following resistance level which corresponds to lows seen by mid-August.

The reaction to prices in Ukraine was not long in coming. They also entered a bearish trend. At this stage, the logical question is whether it will impact other oilseeds such as rapeseed and sunflower. Maybe not, why? Soybeans are only 20% vegoil dependent, while rapeseed and sunflower are about 45% dependent.

In addition, the already anticipated tight rapeseed balance for 2025/26 at the European level and the low level of sunflower production this year should confer some inertia to decline for those two commodities. Ukrainian producers should then rely on the firmness of the global vegoils market.