Global soybean production poised for record growth

Staff
By Staff
2 Min Read

Dive Brief:

  • Global soybean production is expected to increase by the largest percentage in nearly a decade, partly due to the surging demand for biofuels in the U.S.
  • Production in 2024-25 is forecast to rise more than 6% from the previous marketing year to a record 422 million tons, according to a report from the U.S. Department of Agriculture last week.
  • Greater supply comes amid a push to expand biofuels in the U.S. and strong import demand from China. Soybean prices are expected to soften this year, though U.S. exports are forecast to remain strong until early 2025.

Dive Insight:

South America is still recovering from a drought that impacted harvests last year. Although countries like Brazil and Argentina are expecting bumper harvests, the increased supply won’t be realized until early next year.

Supply imbalances in South America will likely give U.S. exporters a boost through the rest of 2024. U.S. soybean exports are projected to rise to nearly 50 million tons, the USDA said, due to lower supplies out of Brazil.

Even with increased supply from Brazil and Argentina, U.S. soybean growers are expected to receive a premium due to strong domestic demand for the crop as a biofuel feedstock. U.S. soybean stocks are forecast to reach the highest level in four years, as surging domestic demand is expected to limit soybean oil exports.

Soybean oil accounted for more than 40% of total feedstocks used for biodiesel production in 2022-23, an increase of 5 billion tons.

China continues to lead import demand for soybeans, though the country has been building up its own domestic supply, which could depress global prices later in the marketing cycle. China is expected to make up 31% of global soybean stocks at the end of the marketing year, the USDA said.

Although U.S. exports are forecast to rise, market share is expected to remain below the five-year average.

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