Soybean is one of the widely traded agricultural commodities which find application in various end use markets ranging from edible oil to livestock feed. Rising demand for protein diet have also supported the steady growth in soybean industry.
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Almost 50% of Argentina's soy imports likely to come from Brazil in 2023March 30, 2023
Import of soybean into China expected to rise.March 23, 2023
Dry conditions impact Argentina soybean cropMarch 15, 2023
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Soybean market frequently asked questions
The global soybean supply grew steadily at a 2.9% CAGR during 2014–2020. In addition, the crop production for 2020-21 is likely to increase by 9.8% against the crop year 2019-20.
The prevalence of cardiovascular diseases (CVD) in tandem with the rising shift among consumers toward health-centric diets is driving the consumption of soybean products.
Grain price fluctuations due to climate changes are a considerable concern among soybean producers. In addition, the climate variations impact the crops due to inconsistent downpours, thus affecting soybean production. Furthermore, various studies have associated soy food products with allergies and potential side effects such as menopause symptoms, cancer risk, and increased cholesterol levels.
Brazil and the US are the prominent soybean exporters, making up for nearly 86% of the overall exports, followed by Argentina, Canada, and Paraguay. Risen disposable income and consolidated supply are likely to underpin 20–30% growth in the soybean and its derivatives trade over the coming decade.
China and the European Union (EU) are the leading soybean importers, making up for nearly ¾ of the overall imports, followed by Mexico, Argentina, and Egypt.
A majority of market players prefer the US, Argentina, and Brazil to source soybeans. While Argentina offers the least soybean prices, the country is subject to political uncertainties. Sourcing soybeans from Brazil is a cost-intensive affair. As such, market players find the US as the feasible option to source soybeans.
Soybean market report transcript
Global Soybean Market Outlook
Global soybean production is expected to increase by 7 percent in 2022–2023. Global consumption expanded at a CAGR of 3.2 percent. Brazil, the US, Argentina, China, and India are the largest producers of soybean in the world, accounting for more than 87 percent of global production.
The US was the world’s major producer and exporter of soybean. However, in recent years, soybean production has increased dramatically in Brazil and Argentina
Soybean consumption is expected to grow by 4 percent in the 2022–2023 crop year, and the total supply could improve by 5 percent compared to the previous year
The major soybean-producing regions are Brazil, the US, and Argentina, which consist of about 82 percent of the global soybeans produce
Global Soybean Trade Dynamics
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.
In the past, the global soybean trade grew at a CAGR of 4.69 percent and is expected to increase by 4.5 percent in 2022-23.
The top soybean exporters are Brazil and the US, accounting for almost 90 percent of the global exports, followed by Paraguay, and Canada
The top soybean importers are China and the EU, accounting for approximately 70 percent of the global imports, followed by Mexico, Egypt, and Argentina
Porter’s Five Forces Analysis on Soybean
Both the buyer (crushing companies) and the seller (seed and trading companies) power to influence the prices in soybean market is mainly based on supply fundamentals. Lack of product differentiation and operational cost reduce the barriers to new entrants and intensity of rivalry is low to medium.
Soybean traders and farmers are the major suppliers
Major trading houses, such as ADM, Cargill, and others buy soybean directly from aggregators and their farmers network
Soybean prices are fixed based on market fundamentals. For instance, suppliers have more control over soybean pricing during undersupplied scenario
Barriers to New Entrants
Product differentiation is low for the soybean seed market, hence the barriers to new entrants is medium
Intensity of Rivalry
In the US, soybean market is very fragmented with an average farm size of 900 acres
Fixed cost is less compared to the operational cost, and hence the rivalry is low
Threat of Substitutes
Soybeans and corn can be easily shifted amongst each other, as they have the same growing seasons and soil requirements
Hence, the price of soybean and corn is a major factor for the farmers and buyers to decide their preferred crop
Approximate 90 percent of the soybeans are crushed to obtain its meal and oil
These crushing companies ADM, Cargill, Bunge account to ~70 percent of the market share, hence have a high negotiating power during oversupplied scenario
Procurement Insights : Soybean
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
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
Why Should You Buy This Report?
This soybean market report comprises first-hand insights, quantitative and qualitative analysis by research analysts, and inputs from industry participants and experts across the value chain. The report offers a comprehensive assessment of macro-economic indicators, parent market trends, and deciding factors coupled with the market attractiveness based on segments and sub-segments. It outlines the major market forces influencing the soybean forecast across various geographies. Furthermore, this research study sheds light on the key technology trends and development taking place in the global soybean industry.
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