NAPERVILLE, Illinois, Oct 26 (Reuters) - U.S. soybean meal exports are well on their way to new highs this season with big weekly sales volumes rolling in after a terrifically bad soybean harvest in top soymeal supplier Argentina earlier this year.
The United States has been perfectly poised to step up soymeal shipments as low-carbon fuel mandates and the soybean-oil boom have pushed U.S. soybean processing to record levels.
As of Oct. 19, U.S. soybean meal exporters had sold 5.5 million metric tons for shipment in 2023-24, which began on Oct. 1. That is a nine-year high for the date and up 45% from a year ago.
Those sales cover 40% of the U.S. Department of Agriculture’s full-year, record export prediction of 13.9 million metric tons, the largest share for the date in eight years and above the five-year average of 33%.
In recent history, final exports were higher than the October estimate whenever sales exceeded 40% by this point, suggesting the record shipment target could expand further.
About 27% of the soybean meal produced in the United States is exported annually, and USDA’s estimates put that at 28% for 2023-24, meaning exports are not expected to be unusually strong relative to soybean processing volumes.
The rise in U.S. export demand and the extreme thinning of supplies in Argentina have recently caught the attention of meal traders. CBOT December soybean meal futures on Wednesday hit a contract high of $439.40 per short ton, up more than 16% in two weeks.
CBOT meal futures are trading at the highest levels for the week since 2012, and nearby contracts are priced at a steep premium versus deferred ones, reflecting a tight domestic market.
GLOBAL TRADE
With its record export projection, the United States is set to account for 20% of global soybean meal shipments in 2023-24, the highest share since 2000-01 but about equal to 2022-23.
USDA estimates show that on an October-September basis, Argentina will account for 34% of global meal exports in 2023-24, ahead of Brazil with 32%. In the previous cycle, Brazil edged Argentina to become the top meal exporter for the first time in a quarter-century.
Argentina’s poor performance will be prominent in the first half of the global 2023-24 season since its new soybean crop will start coming out of the fields next April. Its last crop, harvested earlier this year, had yields of only half normal levels due to severe drought.
Argentine soybean processing volumes between April and September hit 18-year lows, down 26% on the year. Crushing is typically elevated starting in April, so a decent harvest could reenergize Argentine meal trade by mid-2024.
Soybean planting in Argentina typically begins around this time, and although there have been some rains over the last week, drought concerns are still prominent. USDA’s 2023-24 trade assumptions for Argentine soymeal depend on a rebound of soybean yields, though a small downside cushion appears to be factored in.
Argentina’s usual soymeal customers include Asian countries like Indonesia, Vietnam and Malaysia, along with Turkey, Europe and North Africa, so these could be ones to watch in terms of U.S. export sales.
As of Oct. 19, the Philippines was responsible for 19% of U.S. soybean meal bookings for 2023-24, followed by Mexico and Canada at 10% apiece and Ecuador at 8%.
In 2022-23, some 17% of U.S. meal shipments went to the Philippines, 12% to Mexico, 11% to Colombia and 8% apiece to Canada and European Union members. Karen Braun is a market analyst for Reuters. Views expressed are her own.
(Reporting by Karen Braun Editing by Matthew Lewis)
