Argus Murmurings: Effects of port closure expected to be minimal for organic soy market

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Organic soybean imports in April 2024 are estimated at 3,400 MT, down 90% from the prior month and 89% from the prior year. Ukraine and Canada both supplied an estimated 1,600 MT and the remaining balance of 200 MT was sourced from Togo.  

The Argus AgriMarkets Organic and non-GMO service weekly delivered spot price for feed-grade organic soybeans delivered to the U.S. Corn Belt for April 20 was $19.42, which is a decrease of $0.33 from the prior month and $4.15 from the prior year. The market has remained quiet as many buyers are willing to wait to start putting out new crop bids due to long stocks and concerns that prices could fall further. 

The closure of the Port of Baltimore resulting from the bridge collapse is not expected to have a significant impact on the organic soy market. Bulk shipments are not affected, but containerized imports will have to be moved to other ports until at least a partial reopening. Port authorities have indicated that they want a full reopening in May and both April and May have both historically been among the lowest months for imports of organic soy into Baltimore. As a result, minimal volumes are expected to have to be redirected into surrounding ports.  

Energy and commodity price reporting agency Argus acquired Mercaris, the leading provider of organic and non-GMO agricultural commodities in the US, in June 2023. The company is an SSGA member and a monthly contributor to the SSGA E-newsletter. 

Mercaris Murmurings: New Argentine leadership could impact organic soybean imports

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Organic soybean imports in Nov. 2023 increased significantly to 28,000 MT, an increase of 56% y/y and 2200% m/m. Argentina was the largest source with 16,000 MT, followed by Turkey with 8,000 MT. Uruguay and Ukraine both sent 1,000 MT. This was the first month that Ukraine has exported organic soybeans to the United States since Oct. 2022.

Domestic organic soybean prices recovered in November. The price of feed-grade organic soybeans delivered to the U.S. Corn Belt averaged $22.00 during November, which is down $0.15 from the prior month and down $7.49 from a year prior. Organic soybean trading has been quieter than usual for this time of year but has picked up from recent months.

The recent election in Argentina, a major source of organic soybeans, has raised questions about the potential dollarizing of the Argentine economy proposed by the new president would affect exports. In recent years, the Argentine economy has been affected by significant inflation, which has made farmers hesitant to export their grain. Grain stored on farm will be paid for with U.S. dollars when exported to the U.S., so while held on farm the value is not affected by the persistent inflation. When farmers do sell the grain and convert the revenue into Argentine pesos, it then becomes vulnerable to inflation and can lose value quickly. Farmers are then incentivized to hold onto their grain for longer. If the Argentine economy was converted to U.S. dollars, then farmers would have less of an advantage to carrying grain rather than selling it for export. This could help to front end Argentine exports more heavily towards harvest. However, a recent increase of 3% points for export duties will hamper some agricultural exports.

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

Mercaris Murmurings: Positive early harvest indications

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Organic soybean imports in October 2023 were down sharply to 1,200 MT, a decline of 87% y/y and 96% m/m. No country sent more than 1,000 MT in October, with the largest source being Paraguay with 700 MT. Togo was the second largest with 200, followed by Argentina with 100 MT. Uruguay, Canada and China all sent volumes under 100 MT during October.

Domestic organic soybean prices recovered in September. The price of feed-grade organic soybeans delivered to the U.S. Corn Belt averaged $22.00 during July, which is up $1.24 from the prior month and down $12.98 from a year prior. Market activity has been picking up as the organic soybean harvest begins.

Indications for the organic soybean harvest have been overall positive in the United States, but there is some regional variety. The western Corn Belt region has generally seen higher-than-expected yields, though not anything approaching a bumper crop. Generally improved soil moisture across the Corn Belt region contributed to stronger yields than last year, but some areas of western Minnesota still had some soil moisture issues that kept yields below trend. Nebraska and surrounding states in the High Plains have been weaker than other regions, with dry soil conditions causing some hits to yield. Acres that were not irrigated saw significant yield hits, but irrigated acres put out expected yields.

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

Mercaris Murmurings: Organic soybean imports remain strong with increased African exports

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Organic soybean imports were up in September to an estimated 32,000 MT, an increase of 325% y/y and 144% m/m. This large volume was driven by 19,000 MT coming out of Ghana, which is the second largest monthly volume ever seen from the country. Argentina was the second largest source of organic soybeans in September with 11,000 MT. Paraguay, India, and Nigeria each also exported less than 1,000 MT each. Maritime organic soybean meal imports declined in September to 20,000 MT, down 27% y/y and 37% m/m, with most of the imports coming out of Africa. Togo was the largest African exporter with 5,000 MT, followed by Benin with 3,000 MT, Ethiopia with 3,000 MT, and Nigeria with 2,000 MT. Ghana and Mozambique each also exported less than 1,000 MT. The largest organic soybean meal outside of Africa in September was India with 4,000 MT. The remaining 1,000 MT were sourced from Brazil.

Domestic organic soybean prices recovered in September. The price of feed-grade organic soybeans delivered to the U.S. Corn Belt averaged $22.00 during July, which is up $1.24 from the prior month and down $12.98 from a year prior. Market activity has been picking up as the organic soybean harvest begins.

Throughout the 2022/23 marketing year, which concluded in August, 9.3 million bushels of organic whole soybeans were imported into the United States. This is a decline of 17% from the prior year but above 2020/21 levels. Canada was one of the major exporters to see a major drop in exports, with a 48% decline from the prior marketing year to 637,000 bushels. Argentina and Turkey also saw large drops, with year-over-year decreases in volume of 24% and 19% respectively. India almost fully vanished as an exporter of organic soybeans to the United States, with a drop from over 400,000 bushels in 2021/22 to under 9,000 in 2022/23. These large drops were partially offset by the significant expansion of African exports. The largest African exporters of organic soybeans to the United States were Togo with a 171% increase to 1.6 million bushels and Ghana with a 108% increase to 900,000 bushels.

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

Mercaris Murmurings: Organic soybean acreage remains strong

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Organic soybean imports into the United States bounced back in August but remained below historic levels. An estimated 13,000 MT of organic soybeans were imported in August, which is down 64% from the prior year but up over eight times from the prior month. Argentina provided the vast majority of the imports with 11,000 MT. The remaining volume came primarily from Canada, with an additional volume of under 20 MT coming in from China. Maritime organic soybean meal imports were up in August at 32,000 MT, up 11% y/y and 21% m/m. Turkey was the largest source with 12,000 MT, followed by Ethiopia with 6,000 MT. Other African countries sent significant volumes, including 4,000 MT from Togo, 3,000 MT from Nigeria, 1,000 MT from Benin, and smaller volumes from Ghana and Mozambique. India sent another 4,000 MT during August. The remaining volume is covered by volumes of less than 1,000 MT from China and Brazil.

Domestic organic soybean prices rose a small amount during August. The price of feed-grade organic soybeans delivered to the U.S. Corn Belt averaged $21.00 during July, which is up $0.12 from the prior month and down $14.02 from a year prior. With harvest starting soon, soybean market activity has been slow as the market awaits a better idea of how the harvest looks.

Mercaris’ Acreage Analyzer tool was updated in August, which provides initial estimates of 2023 organic acreage. Mercaris estimates that organic soybean acreage fell by just over 4% in 2023, which is a smaller decline than had been expected. This would make 2023 the second largest year for organic soybean acreage on record, below just the prior year. Organic soybean acreage remaining strong could be a bearish force for the market, especially since a large amount of that crop has not been forward contracted. Overall organic field crop acreage rose by about 1%, including a 5% bump in corn acres and a 7% increase in wheat acres.

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

Mercaris Murmurings: Ukraine organic soybean supply could impact US markets

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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

Mercaris Murmurings: Drought worsens organic soybean crop

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U.S. organic soybean imports saw another strong month in June. The United States imported 28,000 MT of organic soybeans in June, which is a 286% y/y increase but a 27% drop from the prior month. The majority of these imports came from Argentina, which exported 21,000 MT to the United States in June. Turkey was the next largest source with 7,000 MT. The balance came from Togo with 500 MT and China with 20 MT. Organic soybean meal imports totaled 33,000 MT in June, which is down 29% from the prior year but up 63% from the prior month. The largest exporter was Turkey with 13,000 MT. Africa also exported significant volumes, with 9,000 MT from Togo and 6,000 MT from Ethiopia. India sent 3,000 MT. India exported 3,000 MT of soybean meal while Ghana, China, and Brazil each all sent small volumes of under 500 MT each.

Domestic soybean prices declined in June after the bump seen in June. The price of feed-grade organic soybeans delivered to the U.S. Corn Belt averaged $21.00 in June, which is down $6.85 from May (though only down $1.48 from April) and down $16.19 from the prior June. Soybean markets have continued to be quiet as users work their way through their existing long stocks. Limited market activity has limited the potential for pricing volatility.

The primary area of interest for the soybean market over the past few weeks has been weather, especially the changing drought situation across much of the major growing regions of the Corn Belt. Based on Mercaris’ estimates of where organic soybean acreage is, drought conditions have worsened for the U.S. organic soybean crop. Mercaris estimates that 8.2% of the organic soybean crop is currently under extreme or exceptional drought compared to just 1.6% at this time last year. This is driven primarily by worsening drought in Iowa, Nebraska and Missouri. There has been some rain in mid-July to help alleviate the worst of the drought in some areas, but continued dryness in others will continue to push down yields if more rain doesn’t arrive soon.

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

Mercaris Murmurings: Organic soybean imports and prices return

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U.S. organic soybean imports returned in May after a weak April. 39,000 MT of whole organic soybeans came into the country in May, which is more than 32 times the prior month and 2 times the prior year. It is also the largest monthly volume since October. The imports were driven heavily by Africa, with record-setting volumes of 22,000 MT from Ghana and 12,000 MT from Togo. The remaining 5,000 MT came from Turkey. Organic soybean meal imports were up 147% from the prior month to 17,000 MT, but down 42% year-over-year. Turkey was the largest exporter at 10,000 MT. Africa was the second largest source, with 2,500 MT from Ethiopia, 2,400 MT from Togo, and 300 MT from Nigeria. India also sent 1,300 MT during May.

Organic soybean prices returned after several straight months of decline. The price of feed-grade organic soybeans delivered to the U.S. Corn Belt averaged $28.50 in May, which is up from $22.92 in April and down from $39.00 a year prior. The price increase was driven by several anomalously high contract values, so it may not be reflective of broader market trends. In Iowa the feed-grade organic soybean price for May was $22.00, which is down $1.00 from the prior month.

With planting wrapped up, the market has been quiet as participants wait to see how the moisture and quality picture develops. The long position on soybeans that has been putting pressure on the market remains in place, which has kept purchasers hesitant to contract significant additional volumes. The long position is expected to be maintained through at least the balance of the year, which should keep continued bearish pressure on pricing. A major supply factor to watch in coming months is if declines in U.S. pricing puts the squeeze on further organic soybean imports.

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

Mercaris Murmurings: Quiet month for organic soybean imports

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Imports of organic soybean – both whole beans and meal – into the U.S. were quiet in April. Just 1,200 MT of organic soybeans came into the U.S. in April, which is 96% below the prior year and down 95% from the prior month. Both the Black Sea and Argentina – which are large sources of organic soybean imports – did not have any volume come in during April. The volume that did come in was primarily from Togo with 1,100 MT. The remaining 100 MT were sourced from Madagascar.

Organic soybean prices ticked down further during April. During April, the price of feed-grade organic soybeans delivered in the U.S. Corn Belt averaged $22.90, down from $24.20 in March and $39.00 from a year prior. Contracting activity has picked up – especially for new crop – but still remains quiet. Most buyers are still long on soybeans from last year and are hesitant to add to their stocks at current prices.

Soybean planting has been ahead of schedule in the largest organic soybean-producing states. As of the last Crop Progress & Condition Report, Illinois – which led the country in organic soybean acres harvested in 2022 – currently has 69% of its soybeans planted. This puts Illinois ahead of pace, with the five-year average being only 48% of the average planting in the ground to date. Meanwhile, the second largest state for organic soybean acres in 2022, Michigan, has planted 95% of soybeans compared to a five-year average of 84%, and Iowa – which is third in organic soybean acreage and first by number of operations – has 69% planted compared to a five-year average of 48%.

Mercaris Murmurings: Organic soybean prices continue to dip

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U.S. organic soybean imports in March reached 22,000 MT, a decline of 14% from the prior year. For the second straight month, Turkey was the largest source of organic soybeans to the U.S. with half of the total import volume coming from Turkey. Argentina shipped an unseasonably large volume of 6,000 MT in March, where normally they do not ship significant volumes until the latter half of the year. The remaining source of organic soybeans was Togo, with 3,000 MT.

Organic soybean prices continued the downward trend that has been seen throughout the year. So far in the month of April, the average price of feed-grade soybeans delivered in the U.S. Corn Belt was $24.40, which is down from $24.60 in March and $39 in April of last year. Trade activity has been unseasonably quiet, especially in new crop. Processors are comfortable working through current supplies, and are mostly unwilling to make new contracts unless prices are below the current market.

In the coming weeks, planting intentions for organic soybeans will become clearer as planting season picks up. Organic soybean seed sellers have indicated that seed sales are below what they were last year, which suggests that planting acreage will come in lower than 2022. The supply situation in Argentina remains dire, with droughts and a freeze having already wiped out at least half of the crop. The deal with Russia to ship grain out of Ukraine is set to end in mid-May, which would end the possibility of further Ukrainian imports if allowed to expire. Both sides of the market remain content to wait and see how the price evolves throughout the growing season.

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.