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The European Commission (EC) is considering imposing a 25% tax on United States (US) imports of corn and soybeans in response to US tariffs, which could significantly affect Spanish livestock farming. As the leading feed producer in the European Union (EU), Spain heavily depends on these imports for animal feed, with 41% of its grain sourced from outside the country. The proposed tariffs could increase prices and limit soybean supplies, leaving Spain with few alternatives. Livestock farmers and other industry sectors are concerned about the impact on their competitiveness. Meanwhile, the feed dehydration industry sees a potential opportunity in increased domestic consumption of alfalfa due to higher soybean costs.
The United States Department of Agriculture (USDA) projects that Argentina will reduce its soybean planted area by 1 million hectares (ha) to 16.5 million ha in the 2024/25 marketing year (MY). This reduction follows a soy-heavy planting year, which farmers adopted due to pest concerns, particularly the leafhopper that had previously driven down corn acreage. Farmers plan to return to their typical corn-soy rotation as pest pressure now eases. Despite the drop in planted area, producers will maintain soybean output at around 49.5 million metric tons (mmt), supported by slightly improved yields. Rising production costs and tight margins threatened profitability, especially with 75% of land under rental agreements. Meanwhile, driven by six-year-high ending stocks, Argentina aims to boost soybean exports by approximately 17%, reaching between 5 and 6 mmt.
In the 2024/25 season, Mato Grosso recorded its highest soybean productivity ever, averaging 66.26 bags per ha, according to the Mato Grosso Institute of Agricultural Economics (IMEA). This record performance, supported by favorable weather and increased producer investments, raised the state’s total soybean production estimate to 50.34 mmt, 27.04% higher than the 2023/24 cycle. The planted area slightly expanded by 1.47% year-on-year (YoY) to 12.66 million ha. IMEA noted that the next update will include a geoprocessing-based consolidation of the planted area and an initial projection for the 2025/26 season. However, despite the strong yields, the production faced challenges, including prolonged rains, which affected soybean quality. They caused logistical bottlenecks, including 24 to 48-hour delays at warehouses and a shortage of trucks, revealing persistent infrastructure limitations.
As of April 7, 2024, Brazil has sold 50.7% of its 2024/25 soybean harvest, amounting to 87.51 mmt out of a projected 172.45 mmt. This marks a 42.4% increase month-on-month (MoM). Compared to the same time last year, the sales pace remains unchanged. Meanwhile, the 2025/26 harvest will reach a record 182.57 mmt, indicating strong growth potential. However, forward sales for this future crop are off to a slow start, with only 3.7% or around 6.94 mmt sold, suggesting cautious market sentiment despite the outlook for a robust harvest.
Between 2022 and Q1-25, imports dominated Moldova's international soybean trade, which accounted for 79.9% or 57.08 thousand metric tons (mt) of the total trade turnover of 71.42 thousand mt. Ukraine was the overwhelmingly dominant supplier, providing 99.22% of Moldova’s imports at 56.64 thousand mt, with minor contributions from Germany at 0.39% and Romania at 0.26%. In contrast, Moldova’s exports were more geographically diversified, reaching ten countries and totaling 14.34 thousand mt. Romania was the top export destination, receiving 49.41% or 7.09 thousand mt of total exports, consistently leading all years.
In W15, Brazil's soybean prices increased 2.78% week-on-week (WoW) to USD 0.37 per kilogram (kg), mainly due to developments in the global soybean market. One key factor is the reduced production estimates for Argentina, which is facing severe drought conditions that have negatively impacted its soybean yield for the 2024/25 season. As Argentina's soybean production declines, global buyers, especially China, have turned to Brazil as a reliable supplier. This shift has led to an uptick in Brazilian soybean exports, particularly to China, which remains a dominant player in the global soybean market. Moreover, Brazil's soybean crop in 2024 has encountered challenges, such as unfavorable weather conditions and localized droughts, contributing to a slight reduction in production estimates. This further tightened the global soybean supply, placing upward pressure on prices. Brazil's position as a key exporter in the South American market and the competition from Argentina's reduced production contributed to a more favorable market for Brazilian soybeans.
In W15, US soybean prices increased by 6.98% WoW and 9.52% MoM to USD 0.46/kg. This rise is due to tightening domestic supplies and increased demand from key importers like China. The USDA’s revised production forecasts for the 2024/25 crop season have indicated a lower-than-expected yield, leading to expectations of a tighter soybean market in the coming months. Moreover, the ongoing disruption in the global supply chain, including logistical challenges and rising shipping costs, has contributed to higher soybean prices. Furthermore, Brazilian Real (BRL) strengthening has made Brazilian soybeans more expensive, making US soybeans more competitive in the global market. These factors have combined to push US soybean prices higher.
In W15, Argentina's soybean prices declined by 2.50% WoW, 4.88% MoM, and 9.30% YoY. Firstly, Argentina's soybean production for the 2024/25 season will be significantly lower due to the continuing effects of severe drought conditions, which have drastically reduced yields. This has contributed to limited available supply for the domestic and export markets. The pricing pressure remains due to weak global demand for Argentine soybeans, particularly from major buyers like China. While demand for soybeans from Brazil has been rising due to its robust production, Argentina experienced challenges in maintaining its competitive edge in the international market.
Secondly, the Argentinian economy has been experiencing high inflation and economic instability, leading to increased costs for producers and slower sales as farmers hesitate to sell in the hope of better exchange rates in the future. Furthermore, the government's export policies, including the soybean export tax and restrictions, have also created uncertainty in the market, causing traders to adjust their positions and slow down sales.
In W15, Uruguay's soybean prices remained steady at USD 0.41/kg as favorable weather conditions boosted expectations of a strong harvest. Despite this, international prices stayed lower, which continued to pressure margins for producers. As a result, farmers adjusted their hedging strategies to manage financial risks. The reference soybean price stood at USD 364/mt, still below 2023. However, shifts in international purchasing patterns supported this price by raising premiums, influencing global demand and trade dynamics.
In response to the potential 25% tariff on US corn and soybeans, Spain's livestock sector should seek to diversify its feed sources by exploring alternative suppliers within the EU or from countries outside the US. Spain could also promote domestic grain production by incentivizing local farmers to increase crop yields through advanced farming techniques or government support programs. This would reduce dependency on US imports, mitigate the impact of higher feed prices, and safeguard the competitiveness of the livestock sector within the EU.
Brazil’s soybean sector must improve storage facilities, transportation networks, and logistics systems to overcome persistent bottlenecks such as warehouse delays, long queues, and truck shortages. These inefficiencies have often led to post-harvest losses and export delays, especially during peak harvest seasons. To address these challenges, stakeholders, including producers, cooperatives, and agribusinesses, should explore public-private partnerships as a strategic way to finance much-needed infrastructure upgrades, particularly in high-output regions like Mato Grosso. Enhancing road and rail connectivity, expanding warehouse capacity, and investing in intermodal logistics hubs will reduce operational delays and transport costs and improve supply chain reliability.
Moldova, heavily reliant on Ukrainian soybean imports, should explore alternative suppliers, including regional options from Romania, Hungary, and neighboring countries. Moreover, Moldova can strengthen relationships with key export markets by diversifying its product offerings, such as processing soybeans into higher-value products like soybean meal or oil. Diversifying both import sources and export markets would help reduce Moldova's risk from potential disruptions in Ukrainian soybean supply, ensuring a more stable trade flow and market access.
Sources: Tridge, CanalRural, Terre Net, UkrAgroConsult
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