More than 90 % of the world’s soybeans are grown in North and South America. With the three biggest producers (Brazil, United States, and Argentina), and a handful of minor producers like Paraguay, Uruguay, and Canada, the world’s number one oilseed crop is actually grown on a relatively small portion of the entire globe.
That’s key for us to remember as the Russia –Ukraine war carries on and grain export challenges out of the Black Sea continue to make headlines. The soybean market is largely driven by things outside of eastern Europe and we need to consider how the forces drive soybeans differently.
Soybean futures prices on the Chicago Mercantile Exchange actually made their big jump up through the $17/bushel price threshold following the February 10 USDA’s World Supply and Demand Estimates where they confirmed the lower South American yields due to this past season’s drought. That was a full two weeks before Russian tanks rolled across the border into Ukraine. It was a third step up in soybean values following both the December and January USDA reports, where analysts lowered their expectations for South American soybean production due to drought, and price responded accordingly.
Estimates of the South American soybean crop production shrunk by 20 million metric tonnes between the planting time yield estimates in November’s report and the February reports when the crop was reaching maturity.
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