Mercaris Murmurings: Ukraine organic soybean supply could impact US markets

After a strong June, U.S. organic soybean imports were quiet in July. An estimated 1,400 MT of organic soybeans came in during July, all of which were sourced from Canada. This is a decline of 97% from the prior year. Organic soybean meal imports were busier, with 27,000 MT arriving during July. This is a 5% increase from the prior year and a 37% increase over the prior month. Turkey was the majority supplier with 16,000 MT. African nations were the next largest source, with 7,000 MT from Ethiopia, 2,000 MT from Togo and another 1,000 MT collected from other African countries. The remaining 1,000 MT were sourced from India.

Domestic organic soybean prices fell just slightly during July. The price of feed-grade organic soybeans delivered to the U.S. Corn Belt averaged $21.00 during July, which is down $0.52 from the prior month and $15.30 from July 2022. Soybean markets have not seen significant activity as buyers await clearer pictures of what harvest will look like and what demand will be during the coming marketing year.

Russia’s announcement that it’s pulling out of the deal to allow the safe export of grains out of Ukraine has raised concerns about how the loss of Ukrainian supplies could impact U.S. organic markets. Ukraine has historically been a strong source of organic soybean imports but has fallen off due to the impacts of the war. Ukraine has sent just 9,000 MT of organic soybeans during the 2022/23 marketing year, compared to an average of 49,000 MT in the preceding five marketing years, with the last imports into the United States coming in February. There is also still time for a new deal to be agreed on before harvest reaches full swing and significant volumes would be expected to be exported out of Ukraine. One major source of risk is further escalation, which could lead to insurance brokers refusing to cover ships leaving the region and would make any further export nearly impossible.

Mercaris, the nation’s leading market data service for organic and non-GMO agricultural commodities, is an SSGA member and a monthly contributor to the SSGA E-newsletter