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.

Mercaris Murmurings: Organic soybean production likely to increase

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U.S. organic soybean harvest has begun making its way north, with 6% of U.S. soybean acres harvested as of Sept. 19, according to the U.S. Department of Agriculture (USDA). Mercaris’ preliminary estimates indicate U.S. organic soybean production is likely to exceed 9.4 million bushels this year, a 15% increase from 2020.  

While harvest looks set to boost U.S. supplies this year, the outlook for imports remains less certain. Whole organic soybean imports were lower again in August, down 1% y/y as imports from Argentina remained limited. In total, 2020/21 MY organic soybean imports reached only 244,000 MT, down 17% y/y. Likewise, U.S. organic soybean meal imports were lower y/y in again in August, down 43% y/y, as imports from India continued to decline. 

Regarding import from India, August also brought the first real indication of what tariff level U.S. organic soybean meal imports from the country could possibly face beginning in 2022. The U.S. Department of Commerce (DOC) released decision memorandum in regarding its determination in the countervailing duty (CVD) investigation following a petition filed in March 2021 by the Organic Soybean Processors of America (OSPA). The DOC’s memorandum suggested a CVD rate of 7.05% to be applied in general to Indian soybean meal exporters, and a much higher CVD rate of 266.37% to be applied to 13 specific exporters who failed to comply with the DOC’s request for information.  

Another decision on possible anti-dumping duties (ADD) is set to be released in October, which could see an additional 158% ADD rate applied to all soybean meal imports from India. While the final determination on these tariffs will not be set until late January 2022 at the earliest, the possibility of significantly tariffs is likely to weigh on organic soybean meal imports leading up to the final determination, and through out the marketing year ahead.  

On balance—with a potentially large U.S. harvest, and uncertain import outlook—U.S. organic soybean prices appear to be holding steady-to-slightly bullish. Over August, organic feed-grade soybean delivered to U.S. corn belt elevators averaged $32.08/bu, gaining nearly $1.50/bu from July, and up more than $11/bu over year ago prices. Although U.S. production is likely to offer some relief to persistently tight U.S. organic soybean supplies, the greater risk of disrupted trade may easily offer additional bullish price support as 2021/22 marketing year progresses. 

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 Murmurmings: Organic markets stabilizing ahead of harvest

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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?

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. Be sure to check out an interview with Mercaris CEO Kellee James on SSGA’s IP-ODCAST.

Mercaris Murmurings: Organic soybean markets remain unsettled

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U.S. organic soybean markets remained unsettled over June, following an unsettled outlook for production, imports and prices. Across the U.S. Corn Belt, the outlook for organic soybeans has generally improved as much-needed precipitation helped ease drought conditions across Iowa, Michigan and Wisconsin. The exception to this trend appears to be Minnesota, with the U.S. Drought Monitor reporting 100% of the state experiencing drought conditions the week of July 20 and 4% of the state experiencing extreme- to exceptional-drought conditions. Overall, Mercaris estimates that 61% of organic soybean acres across the Corn Belt were rated in good to excellent condition as of July 18, down slightly from 69% last year.

While the U.S. crop outlook has improved slightly, the pace of import has also picked up speed. In June, U.S. organic soybean imports saw their largest month since the start of the MY, pushing above levels of a year ago by nearly 20%. The month saw imports from Argentina reach their highest level since June 2020, while imports from the Black Sea region reached their highest levels since September 2020.

U.S. organic soybean meal maritime imports also remained higher year over year for the 10th month in a row, up 7% year over year. That said, June did see the first substantial decline in organic soybean meal from India, which declined to its lowest level since October 2018, down 26% y/y. Ultimately, organic soybean meal imports for the month were supported by shipments from Turkey, with the United States importing nearly 12,000 MT from the country over the month.

Despite indications that U.S. organic soybean supplies might improve over the remainder of the marketing year, prices continue to reflect a tightening U.S. supply situation, with organic feed-grade soybeans delivered to U.S. elevators averaging $30.41/bu during June, up $3.37/bu from May and gaining $11/bu over 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: U.S. supplies continue to tighten

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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.