Mercaris Murmurings: Organic import volumes remain significant

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In August, U.S. organic soybeans saw a second consecutive significant month, with imports reaching over 49,000 MT. That is a total of almost 100,000 MT over the last two months. Over August, organic soybean imports were supported by significant volumes from Argentina with 30,500 MT and 13,200 MT from Turkey. Through August 2021/22, organic soybean imports reached 305,000 MT, up 27% year-over-year and up 4% from 2019/20.

Total organic soybean meal maritime imports reached 22,900 MT over August – the lowest amount since April – but up 70% year-over-year. The most significant number of imports came from China with 8,500 MT and over 6,000 MT coming from Turkey and India combined. Total U.S. organic soybean meal imports are still down 32% year-over-year at 278,000 MT through August 2021/22.

As fall begins, organic soybean prices have continued to soften. Over September, prices for organic feed-grade soybeans delivered to U.S. Corn Belt elevators averaged $32.09/bu., the lowest average for a month of 2022 and down $2.68/bu. from August. Depending on how the harvest goes, we could see organic soybean prices begin to move bullish or bearish over the coming month.

While soybeans were getting some bullish pressure over August, we have continued to see the prices soften. With the continued steady imports of organic soybeans – even if we see a reduction in yields for soybeans from last year with an increase in total organic soybean acres – it is possible there will not be as much bullish pressure on organic soybeans as there once was. Although supply has continued to build as we arrive at harvest, there is still much uncertainty. There continue to be large imports of organic soybeans from Turkey, and it is difficult to say how long those can continue. If those imports come to a halt – even with a large number of organic soybean imports over the last few months –there will be a lot of weight on the U.S. production of organic soybeans to avoid bullish pressure reappearing in the organic soybean market.

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

Mercaris Murmurings: Organic soybean prices dropping before harvest

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U.S. organic soybean imports continued to build, reaching over 59,000 MT over July, up 40% y/y. Over July, organic soybean imports were supported by significant volumes from Argentina and Turkey. In total, organic soybean imports reached 266,000 MT through July 2021/22, up 15% y/y and only down 5% from 2019/20. Total Organic soybean meal maritime imports saw another strong month in July after a considerable recovery month in June, reaching 26,000 MT, mainly from Turkey. Total U.S. organic soybean meal imports are still down 35% y/y at 255,000 MT through July 2021/22.

With harvest quickly approaching, prices for organic soybeans have finally started to come back down after being around $38-$42 per bushel for most of the summer. Over August, prices for organic feed-grade soybeans delivered to U.S. Corn Belt elevators averaged $35.00 per bushel, the lowest average for a month since March 2022. However, as harvest nears, prices appear to be trending back up. Bids for both the spot market and new crop delivery have increased over the last two weeks, indicating that there may be some bullish pressure ahead of harvest.

As harvest approaches, much uncertainty still looms in the organic soybean market. While recent prices indicate some bullish pressure, it is still possible that prices soften at harvest time. Even with organic soybean yields in question, there is still expected to be a substantial increase in U.S. organic soybean production. On top of that, organic soybean imports have been growing, with soybeans continuing to stream into the U.S. from Argentina and Turkey. While the Turkey imports are in question of how long they can continue, there are reports that Argentina could continue to ship soybeans to the U.S. in large quantities. Only time will tell if the increased production and imports will be enough to meet the U.S. demand.

Mercaris, the nation’s leading market data service and online trading platform 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 continue to climb

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U.S. organic soybean imports were higher y/y for the seventh month in a row, reaching 23,000 MT over May. Organic soybean imports were supported in May by large volumes from Africa as well as another month of increased imports from India. Organic soybean meal maritime imports increased over May from the prior month, approaching year-ago levels. Volumes moved higher as imports from India reached their highest level since October 2021, and shipments from the Black Sea region remained strong. In total, U.S. maritime imports of organic soybean meal reached 29,000 MT over May, down 9% y/y.

With the end of the second quarter of 2022 approaching, prices for organic soybeans appear to be getting a break from the bullish pressure they have felt since the start of the year. Over the two-week period ending June 18, prices for organic feed-grade soybeans delivered to U.S. Corn Belt elevators averaged nearly $41.00 per bushel, mostly even with the midpoint of the prior month. The spot market for organic soybeans has remained very tight, although it appears that many purchasers have secured most of their needs for the rest of this marketing year. Bids for new crop delivery continue to run below spot bids as the fall supply outlook remains uncertain, and organic livestock feed purchasers look to protect against increased production costs.

Looking toward the third quarter, prices appear to have limited room for additional bullish support. Given the current discount for new crop bids relative to spot, it’s possible some bearish price pressure may begin to develop this fall. However, the outlook past the end of 2022 is far less certain. Although this year is expected to see another substantial increase in U.S. organic soybean production, the majority of U.S. supplies will remain dependent of foreign supplies, which have yet to stabilize after the past two years of significant and continuous disruption.

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

Mercaris Murmurings: U.S. organic soybean imports build, soybean meal imports drop

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U.S. organic soybean imports continued to build over April, exceeding 36,000 MT, or the largest import volume since July of 2021. Organic soybean imports were supported over April by another month of elevated imports from India—reaching 6,000 MT—as well as the third-consecutive month of elevated imports from the Black Sea region—reaching 25,000 MT. In contrast to organic soybeans, imports of organic soybean meal remained reduced over April at less than 12,000 MT, or their lowest level for the month since 2018. In somewhat of a departure from recent months, April’s organic soybean meal imports were largely sourced from India, with import from the country exceeding 10,000 MT for the first time in seven months. However, imports from India were lower over April compared to historical values, with imports over the month down 47% from the same month in 2021.

Although import volumes showed a slight improvement over April, prices have resume modest upward pressure. Over the two-week period ending May 14, 2022 prices for organic feed-grade soybeans delivered to U.S. Corn Belt elevators averaged $40.37 per bushel, up more than $1.00 per bushel from the start of the prior month. As of May 2022, the spot market for organic soybeans has become very tight in the U.S. This situation is due in large part to constricted U.S. supply. However, current price levels appear to be creating their own constraints on the market. In conversations organic market stakeholders, it has been anecdotally confirmed that throughout the supply chain many operations have adopted a hand-to-mouth supply management strategy as a form of protection against market price volatility. With much of the industry focused on locking in short-term needs, and at reduced volumes, overall contracting activity within the market has slowed over the second quarter of the year, resulting in reduced supply liquidity.

The reduction in liquidity appears to be extended into new-crop contracting as well, and for much of the same reason. Over May, contracts for new-crop delivered organic soybeans are being bid, and executed at a discount to spot markets as purchasers seek protection from potentially bearish market pressure this fall when the U.S is likely to experience a record organic soybean harvest, and seasonally escalating imports from Argentina. However, this discount appears to be limiting producer interest in securing new crop contracts given elevated spot market prices, as well as bullish price risk stemming from the on-going threat of Indian and Black Sea trade disruptions.

In total, as planting proceeds this spring, all sides appear to be sizing up future supply risks. While many factors suggest U.S. harvested acres will grow substantially this fall, imports will ultimately remain the deciding factor for U.S. supplies over the next year. Unfortunately for all though, imports will also remain the most uncertain.

Mercaris Murmurings: U.S. organic soybean acreage expected to increase

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Organic soybean prices are holding steady but elevated into April, as the market weighs the supply outlook for the rest of the year. While early indications from organic seed sales suggests an increase in U.S. organic soybean acreage as high as 20% this year, an expansion of this scale is likely to result in a less than 2 million bushel expansion in U.S. production. Putting this in perspective, U.S. organic soybean meal imports have fallen nearly 119,000 ST over the first seven months of the 2021/22 MY, or the equivalent of nearly 4 million bushels of organic soybeans.

Looking more closely at organic soy imports, March did bring another month of strong organic soybean imports, reaching nearly 730,000 bu, supported by notable imports from the Black Sea region and India. The imports from India are particularly striking, as March achieved the highest monthly volume from the country since March 2019. In contrast, organic soybean meal maritime imports fell below 10,000 ST over March, down to their lowest level since August 2017. Imports slumped, in part, as the flow of organic soybean meal from Russian and the Black Sea region were was halted in March.

As the market outlook remains tightened, prices for organic feed-grade soybeans delivered to U.S. Corn Belt elevators average $39.26 per bu over the two-week period ending April 9, 2022, up about $0.20 per bushel from the start of the prior month. While prices have stalled at the start April, the next two months are likely to be critical as farms lock in planting decisions, and organic livestock operations look to lock in feed supplies for the remainder of this marketing year.

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

Mercaris Murmurings: Organic outlook tightens amid Ukraine conflict

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The market outlook for organic soybeans continued to tighten over the first half of March, with prices averaging $39 per bushel delivered to U.S. Corn Belt elevators over the two-week period ending March 12. That’s up nearly $2.50 per bushel from the start of the prior month. With the February incursion of Russian forces into Ukraine, the outlook for not only organic soybeans but the broader organic oilseed market took another step toward tightening supplies. As reported previously by Mercaris, over 2021 Russia and Ukraine jointly accounted for 13% of the U.S. organic soybean meal imports and 35% of whole organic soybeans imports. Furthermore, Ukraine alone accounted for 17% of U.S. organic sunflower and canola imports.

In keeping with the tight supply outlook, organic soybean meal maritime imports remained well below year-ago levels over February, reaching only 13,000 MT, or down 59% y/y. However, February did bring some positive news for whole organic soybeans. Over February, U.S. whole organic soybean imports reached 36,000 MT, their highest level since July 2021. With February’s surge, 2021/22 marketing year-to-date organic soybean imports reached 115,000 MT, up 11% y/y.

Despite February’s bump, however, the import outlook for whole organic soybeans remains challenging. Mercaris had looked to the Black Sea region to supply the U.S. with organic soybeans, as well other oilseeds over the remainder of 2021/22, an outlook that now appears to be questionable. With the deteriorating situation in Ukraine, it now appears questionable if organic soybean imports will be able to finish out the 2021/22 marketing year head of 2020/21.

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

Mercaris Murmurings: Organic prices regain momentum

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Organic feed-grade soybean prices are regaining bullish momentum in February, averaging $36.50 per bushel delivered to U.S. Corn Belt elevators. That’s up more than $3.50 per bushel from the start of the year. Organic soybean prices gains had leveled off at the end of 2021 as the industry assessed last year’s record-setting harvest of 10.4 million bushels. However, it appears the market anticipates supplies tightening over the remainder of 2021/22, as imports continue to slow, and prices move higher. 

Regarding imports, January did see organic soybean imports increase 7% year-over-year to nearly 14,000 MT, with the Black Sea region and Canada accounting for the bulk of imports over January. Imports from India remain reduced, and imports from Argentina slowed along seasonal lines. However, though January, organic soybean imports for the 2021/22 marketing year had reached 78,000 MT, down 14% y/y. 

Organic soybean meal maritime imports remained below year ago levels in January, reached only 13,000 MT, or their lowest monthly volume since April 2017. The drop in imports can be entirely attributed to India, and a dramatic cut in supplies from the country. Over January, U.S. organic soybean meal imports from India were below 1,000 MT, or down 97% y/y. 

With imports of both whole organic soybeans and organic soybean meal pulling lower, the supply outlook is likely to continue to tighten over the next few months. Without a large increase in imports from either the Black Sea region or Africa, it appears unlikely U.S. organic soybean prices will receive much relief before the third quarter of this year. 

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

Mercaris Murmurings: Organic soybean markets risky and unsettled

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With 2022 in full swing, and organic soybean markets as unsettled and risky as they have ever been, it’s worth taking a moment to size up the market’s overall position. First, looking at U.S. supplies Mercaris estimate U.S. organic soybean production reached 86,000 MT over the 2021 harvest, up 15% y/y (11,000 MT). As has been heavily reported, the primary risk for 2022—and likely the next couple of years—is imported organic soybean meal sourced from India, which accounted 43% of U.S. total organic soy supplies over the 20/21 marketing year, and reached a record setting 333,000 MT. Resulting from multiple factors—none of which are likely to be resolved in the near future—imports of Indian organic soybean meal have plummeted this year, down 77% y/y over the first four months of the 21/22 MY, or a deficit of nearly 112,000 MT relative to last year.

With the deficit in imports from India, the question of supply over the next year rests entirely on the ability of the U.S. to source organic soy from other markets. Thus far, imports from Argentina, who is the largest forging supplier of whole organic soybeans to the U.S., have increased 40% y/y over the first four months of 2021/22. But, this increase in reality only stacks up to an additional 8,000 MT of organic soybeans. Imports from Canada are up an astounding 199%, adding 10,000 MT of organic soybeans to U.S. supplies—relative to last year. However, and despite these gains, imports on the whole have not responded strongly thus far. Combined imports from India and the Black Sea region have fallen by more than half, down nearly 32,000 MT. In total, U.S. organic whole soybean imports have only reached about 64,000 MT over the first four months of 2021/22, or down more than 13,000 MT y/y.

To round out organic soybean imports, organic soybean meal imports from countries other than India have responded strongly, up nearly 350% y/y. However, this is only a net-gain of 50,000 MT, less than half of the loss of organic soybean meal imports from India. So, to sum up, through the first four months of 2021/22 organic soybean supplies are down about 2,000 MT, while organic soybean meal imports are down more than 61,000 MT.

To generally describe the current U.S. organic soybean market condition as tight appears to be accurate at the start of 2022. In terms of marketing organic soybeans over the remainder of this winter, and into spring, there currently appears to be very little to suggest any significant amount of bearish price pressure will appear soon. The longer-term perspective, into this summer and approaching the 2022 harvest, it’s possible some of price relief may manifest if imports from the Black Sea region and from Latin America show signs of improvement. However, thinking about prices over the 2022 fall, a lot will depend on how much U.S. organic soybean acres can respond to the current situation and prices.

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

Mercaris Murmurings: Organic soybean prices still strong

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Organic soybean prices remained strong into November, even as the end of harvest nears. As of Nov. 14, Mercaris estimated U.S. organic soybean harvest at 88% complete, putting it on pace to be nearly complete by early December. With harvest steadily progressing, yields continue to look positive, suggesting that Mercaris pre-harvest estimate of 37.5 bushels per-acre may need to be revised higher.

Despite the prospect of an excellent U.S. harvest, the market appears supported by a persistently tight outlook for U.S. organic soy imports. Over the first two months of the current market year, U.S. organic soybean imports only reached 22,900 MT according to Mercaris estimates, down 60% year-over-year. Likewise, maritime imports of organic soybean meal reached 62,300 MT according to Mercaris estimates, down 68% y/y.

Adding to the bullish support currently offered by imports, October brought two developments that could lead long-term price support. First, on Oct. 20 India’s Agricultural and Processed Food Products Export Development Authority (APEDA) issued a decision barring four organic certifying agencies (CU Inspections India Pvt Ltd, ECOCERT India Pvt Ltd, Indian Organic Certification Agency, Aditi Organic Certifications Pvt Ltd) from registering any new processors or exporters of organic products.

Furthermore, APEDA issued a year-long suspension for OneCert International, effectively prohibiting the organization’s ability to provide organic certification altogether. This announcement will likely impede the re-certification efforts many Indian operations are pursuing following the National Organic Program’s (NOP) January decision to end its recognition agreement with India, making it difficult to achieve recertification by the July 12, 2022 deadline set by the NOP.

Second, the Department of Commerce (DOC) released a Decision Memorandum regarding its determination in the anti-dumping duty (ADD) portion of its investigation of organic soybean meal from India. In the memorandum, the DOC determined that Indian-sourced organic soybean meal is likely being sold in U.S. markets at less than fair market value, thus warranting an ADD in addition to the CVD. The DOC’s ADD findings were split along the same adverse facts available (AFA) line as the CVD finding. For those who were assessed the rate of 266.37% in August’s CVD finding, the DOC determined that an ADD rate of 18.85% is appropriate. For those who were not assessed the AFA rate, the DOC determined that an ADD of 3.11% is appropriate. However, the ADD is based on the DOC determining that Indian organic soybean meal is being sold at below-market prices in the U.S. As part of this finding, the DOC also determined 7.02% offset should be applied to the ADD rate based on the potential impact of Indian subsides. As a result, non-AFA operations will potentially face an ADD of 0% (3.11% – 7.02%). For all others, who were assessed the AFA rate, their affective ADD rate will be 11.83% + (18.85% – 7.02%).

Under these conditions, U.S. organic soybean prices have declined only slightly. Over October, organic feed-grade soybean delivered to U.S. Corn Belt elevators averaged $31.90/bu, down $0.70/bu from September but still $12.65/bu above year-ago prices.

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

Mercaris Murmurings: Organic prices remain bullish during harvest

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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.