Soybean Meal

Soybean Meal Global Market Outlook

• The global soybean meal supply is projected to increase by nearly 4 percent in 2022–2023. The production of soybean meal for 2022–2023 is expected to improve by 5 percent with the increased export demand.

• Strong export demand is expected in the coming season, however, an increase in soybean crushing in South America and the US is likely to cap any steep rise in prices in Q4 2022.

• Rising soybean crushing levels and increased demand from both domestic and export markets will be the major price-driving factors for soy meal in this quarter, which is expected to continue in the beginning of 2023 as well.

Global Soybean Meal Supply–Demand Analysis

The global soybean meal witnessed a CAGR growth of approx. 1.89 percent in the last five years is expected to witness a further growth of around 4.2 percent in the next five years. Brazil, the US, Argentina, China, and Europe are the largest producers of soybean meal in the world, accounting for more than 80 percent of the global production.

Market Outlook

• In recent years, soybean meal production has increased drastically in Brazil and Argentina. Argentina is also one of the largest exporters of soybean meal.

• Soybean meal consumption is expected to grow by 3.1 percent in 2021-22 crop year, and the total supply could improve by 2.4 percent compared to the previous year

• The major soybean meal producing regions are China, Brazil, U.S and Argentina, which consist of about 75 percent of the global soybean meal production.

Global Soybean Meal 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.

Soybean Meal Exports by Country (2021–2022 E)

• In the past, the global soybean meal trade grew at a CAGR of 0.98 percent in the last five years. Exports are expected to witness and increase of 1.9 percent in 2021–2022

• The top soy meal exporters are Argentina, Brazil and the US, accounting for almost 84 percent of the global exports, followed by India, Paraguay, and others.

• The top soybean meal importers are the EU and South East Asia, accounting for approximately 50 percent of the global imports, followed by the UK and Mexico.

Key Factors Driving the Soybean Procurement Strategy

Best Sourcing Months

• The soybean meal prices are usually low in the fourth quarter. 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 availability of feedstock for soybean meal production is also likely to be high during these months. Hence, the prices for soy meal is likely to be low in Q4.

• The soybean meal prices are the lowest high arrivals of soybeans crops during these months

Best Sourcing Regions

• The best sourcing regions for soybean meal are the US, Brazil, and Argentina

• The price difference between US and Brazil origin soybean is relatively high. The prices of US origin soybean meal are relatively lower than LATAM origin soybean meal.

Contract Structures

• Soybean meal 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