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The latest update on the global soybean market reveals a cautiously optimistic outlook for the 2024/25 season, with modest month-on-month gains in production, trade, and utilization. Despite localized weather-related challenges, particularly in the Southern Hemisphere, forecasts suggest that global inventories are on track to reach record levels, underscoring improved resilience in the soybean supply chain.
Production: Small Gains Driven by Brazil
Global soybean production for the 2024/25 season has been marginally increased, driven primarily by an upward revision in Brazil’s output. The higher forecast for Brazil has more than compensated for production downgrades in Paraguay and South Africa, where weather conditions have impacted yields. The adjustment reflects a broader recovery across key producing nations, particularly in South America.
Utilization: Crush Demand Fuels Slight Increase
On the demand side, global utilization for 2024/25 has been adjusted slightly upwards, mainly due to increased crush projections in Argentina and the Russian Federation. However, this was partially offset by reduced consumption forecasts for Paraguay, South Africa, and the UK. These revisions suggest a slight shift in regional processing dynamics while maintaining overall demand stability.
Trade Outlook: Brazil Drives Slight Upturn Amidst Year-on-Year Stagnation
Global soybean trade for the 2024/25 marketing year (October/September) has also seen a marginal upward revision, underpinned by a modest increase in Brazil’s export forecast. However, despite this slight uptick, total global trade is still expected to remain flat year-on-year, reflecting subdued global demand growth and evolving trade policies.
Stocks: Record Inventory Levels Expected
End-of-season carry-out stocks for 2024/25 are projected to remain virtually unchanged, supporting earlier projections of record-high global inventories. This level of carryover suggests greater supply security heading into the next season and could temper potential market volatility.
Crop Conditions Around the Globe
Harvesting in the Southern Hemisphere and sowing in the Northern Hemisphere are progressing concurrently, with varied crop conditions across regions:
- Brazil is experiencing exceptional harvest conditions in the North and Central-West, enabling rapid progress. However, parts of the South, particularly Rio Grande do Sul, are facing yield pressure due to heat and limited rainfall.
- In Argentina, while yield variability persists, rainfall in February and March has boosted recovery in most regions, with early-planted crops being harvested and late-planted ones just beginning.
- South Africa continues to face mixed conditions, as ongoing rainfall delays harvesting in several provinces.
- In the United States, sowing has begun, with a notable reduction in sown area expected compared to the previous season.
- In China, sowing is underway in the northeast under favourable conditions.
Policy Update: Argentina Approves New GM Soybean
In a significant policy development, Argentina approved a new genetically modified (GM) soybean variety on April 1 under Provision 9/2025. The variety features dual resistance to herbicides and the soybean cyst nematode pest, potentially enhancing yields and reducing production costs for farmers. The move may also influence regional seed markets and biotech adoption in Latin America.
International Prices: Modestly Firmer in April
International soybean prices strengthened slightly in April, with the IGC GOI sub-Index up by 1%, supported by firm demand and favorable macroeconomic trends. While ample Brazilian supplies and ongoing US-China trade tensions capped gains, the market was buoyed by:
- Weakness in the US dollar
- Higher vegetable oil prices
- Tightening US old crop supplies
- Expectations of reduced 2025/26 US acreage
In Brazil, export quotations firmed, aided by stronger Chicago futures, although export premiums later eased as farmer sales accelerated.
Conclusion: A Stable Yet Cautious Outlook
The global soybean market enters the 2024/25 season with stable fundamentals, driven by marginal improvements in production and trade. High carry-out stocks provide a buffer against supply disruptions, while regional disparities in crop conditions highlight the ongoing sensitivity of the sector to climatic variability. Going forward, policy developments and acreage decisions, especially in major exporting countries, will be key to shaping price trajectories and trade flows.
