Global Soyabean Market Outlook

  • The global soybean supply has been witnessing a steady growth of 6.7 percent CAGR during 2013 –2018 crop years. The crop supply for 2018/2019 is expected to improve by 3.5 percent against the current crop year 2017/2018
  • The anticipated increase in supply is primarily due to high-ending stocks for 2017/2018
  • Tight soybean meal has been witnessed lately and has been supporting the soybean demand in 2017/2018 and could also be observed in H1 2018/2019soybean-global-market-size

Contract Structure

  • Large buyers, such as crushing mills (~85–90 percent of the global soybean supplies) procure soybean in three months contracts 
  • The feed and food industry buyers are small scale buyers and usually opt for medium to long-term contracts

Price Benchmarking

  • Soybean prices and contract structures are majorly fixed by the suppliers using CBOT futures. The basis and freight costs are added to the CBOT prices based on the destination. Usually, the basis is calculated as the difference between cash and futures prices 
  • The profit margin depends on the time of buying and selling, which is driven by the supply scenario of the given crop-year

Global Soybean Supply–Demand Analysis

  • In 2017/2018, the total global production is estimated to decline by 4 percent, and consumption is expected to increase by 4 percent compared to the previous year

  • The US and Brazil remain the largest soybean producers, accounting for about 70 percent of the global production

Market Outlook – 2017/2018

  • The global production and consumption of soybean from 2013 – 2014 to 2017 – 2018 grew at a CAGR of 4.5 percent and 5.5 percent, respectively
  • Soybean consumption is expected to grow by 4.5 percent in 2018 – 2019 crop year, and the production could improve compared to the previous year
  • The major soybean producing regions are the US, Brazil, and Argentina, which consist of about 82 percent of the global soybeans produce

Global Soybean Trade Dynamics

  • Brazil and the US are the largest soybean exporting countries, accounting for about 86 percent of the global exports, while China is the largest importer of soybean. Increase income levels and consolidated supply are expected to support 20 –30 percent growth in the soybean and its derivatives trade in the next 10 years. LATAM is expected to lead the trade growth in the upcoming years.
  • From 2013 – 2014 to 2017 – 2018, the global soybean trade grew at a CAGR of 7.8 percent, and the trend is expected to continue in 2018 – 2019
  • The top soybean exporters are Brazil and the US, accounting for almost 83 percent of the global exports, followed by Argentina, Paraguay, and Canada
  • The top soybean importers are China and the EU accounting for ~74 percent of the global  imports followed by Mexico, Japan, and Taiwan

Procurement Insights

Best Sourcing Months

  • Based on the seasonality of soybean, the prices of soybeans are expected to witness the lowest levels during the months of October, November, and December in the crop-year 
  • The soybean prices are the lowest high arrivals of soybeans crops during these months

Best Sourcing Regions

  • The best sourcing regions for soybeans are the US, Brazil, and Argentina 
  • Although the prices of soybean are the lowest in Argentina (this is due to currency devaluation), there are a lot of political uncertainties in the country, which limits the sourcing preferences. Brazilian soybeans are the most expensive, and hence the US is a viable option to source soybeans

 Benzoic Acid Supply Scenario Contract Structures

  • Soybean prices and contract structures are fixed by the US suppliers by adding CBOT Futures, basis, and freight costs. Basis is the difference between cash and future prices. Profit margin depends on the time of buying and commodity selling