Mercaris Murmurings: Organic prices remain bullish during harvest

Organic soybean prices are slightly bullish as harvest progresses and imports continue to fall. As of Oct. 17, Mercaris estimates the U.S. organic soybean harvest was 55% complete, mostly even with last year’s harvesting pace, though recent heavy rains across the Corn Belt could temporarily slow harvesting.

Over September, U.S. organic soybean imports were down 86% y/y following minimal imports from China and India and a continuation of the trend of reduced imports from Argentina. Maritime imports of organic soybean meal were down 36% y/y — lower y/y for the third month in a row — following reduced organic soybean meal imports from India.

With harvest and imports moving in opposite directions, prices have moved only slightly higher. Over September, organic feed-grade soybean delivered to U.S. Corn Belt elevators averaged $32.70/bu, up $0.62/bu from August and up more than $12.50/bu over year-ago prices.

Although prices have demonstrated only slight, steady gains so far this market year, it’s very possible this could change by the end of November. First, the U.S. Department of Commerce (DOC) is expected to release a decision on possible anti-dumping duties (ADD) against India by the end of October, which could see an additional 158% ADD rate applied to all soybean meal imports from India. Second, U.S. organic soy imports have been remarkably low over recent months. While organic soybean imports are often reduced during harvest, the first quarter of 2021/22 is on pace to see organic soybean imports reach their lowest level since the 2013/12 marketing year.

Given the current pace of harvest, most of the 2021/22 crop will be out of the fields by early December. That, coupled with pending organic soybean meal import tariffs and falling organic soybean imports, could quickly turn the market’s attention to planning spot purchases for 2022 and usher in a more volatile U.S. organic soybean market.