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. 

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.

U.S. organic soybean markets appear to be stabilizing ahead of harvest. Although weather has created challenging conditions for many growers, periodic rains over the past month have helped alleviate dry conditions in portions of Michigan and Wisconsin. Overall, crop conditions have stabilized across the Corn Belt, with Mercaris estimating 63% of organic soybean acres rated in good to excellent condition as of August 15, according U.S. Drought monitor data. Additionally, the USDA’s August crop yield estimates suggest that U.S. organic soybean yields are on track to meet, if not exceed last year’s level following higher yield expectations along the southern and eastern portions of the Corn Belt, as well as across the Northeastern portion of the U.S.

Imports continued to offer mixed market signals over July. Organic whole soybean imports fell back below year-ago levels, down 8% y/y, despite increased imports from both Argentina and the Black Sea region. Increase imports from Argentina are particularly noteworthy, as reduced supplies from the country have been a major element of this past year’s reduced supply situation. With two consecutive months of increase imports from Argentina ahead of the 2021/22 harvest, it’s worth considering if these shipments will continue as the U.S. harvest adds to supplies domestically.

U.S. organic soybean meal maritime imports were lower y/y in July for the first time since August 2020, down 19% y/y. July’s decline followed a 58% y/y decline in imports from India, marking the second consecutive month of reduced imports from the country. Prior to June, U.S. organic soybean meal imports from India were remarkably larger, exceeding 250,000 MT through May of the 2020/21 MY, up 41% y/y. However, the slowing of U.S. organic soybean meal imports over the past two months could be the first signals of tightening supplies from the country.

With a stabilized U.S. production outlook and mixed imports, U.S. organic soybean prices appear to be holding steady. Over July, organic feed-grade soybean delivered to Corn Belt elevators averaged $30.12/bu, down slightly from June, but still up more than $11/bu over year-ago prices. As the 2021/22 marketing year begins, it worth considering if prices have room to fall following increased U.S. production and imports. Or will weather ultimately trim the U.S. crop as imports repeat the sluggish pace of 2020/21?

Over the month of May, market conditions for organic soybeans continued to indicate tightening U.S. supplies. Over the month, organic soybean imports declined to their lowest level since November 2011 as the U.S. did not import organic soybeans from Argentina, India, Russia or the Black Sea region. The month did see further expansion of U.S. organic soybean imports from Africa, with the majority of U.S. organic soybean imports originating from the country of Togo. 

Organic soybean meal maritime imports continued to show signs of slowing relative to the start of this MY, up only 11% y/y compared to up 83% y/y over the first half of 2020/21. In general, the remainder of 2020/21 is likely to see organic soybean meal imports slow relative to the start of the MY, as Indian supplies are tightening and transportation logistics remain challenging. Imports from the Black Sea region may offset this trend if higher prices and limited soybean supplies in the U.S. persist through the summer months. 

Overall prices continue to reflect a tightening U.S. supply situation, with organic feed-grade soybean delivered to U.S. elevators averaging $25.92/bu during May, up $14% from the prior month, and up nearly 26% y/y. 

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.