Recent trading activity indicates that Brazilian soybean meal has surpassed Argentine prices due to supply concerns linked to an impending strike in Argentina. On February 26, Brazilian meal was priced at $327.38 per metric ton compared to $323.53 for Argentina, illustrating a competitive shift driven by uncertainties in soybean processing capacity and favorable weather conditions in Brazil.
Brazilian soybean meal has recently outperformed Argentine counterparts as supply issues arise in Argentina. On February 26, the price of Brazilian soybean meal at FOB Paranagua was assessed at $327.38 per metric ton, surpassing Argentina’s FOB Up River price of $323.53 per metric ton for April shipment. This marks a notable shift from earlier prices, which showed a more competitive landscape as recently as February 18.
Concerns surrounding Argentina’s processing capacity for soybeans have led traders to turn to Brazil for immediate supplies. The Argentine oilseed union, SOEA, announced the potential for a nationwide strike, which would halt operations at soybean crushing plants amid a wage dispute linked to the Vicentin company, a significant player in the industry that has struggled to meet payroll obligations.
Within the Brazilian market, a trader noted that the export premium for Argentine meal has become less competitive, prompting increased business activity at Brazil’s FOB Paranagua. Following announcements regarding the prospective strike, several parcels of Brazilian soybean meal were sold for April shipment at improved pricing, with the export basis shifting toward more favorable terms.
The demand for soybean meal is fueled by its crucial role in animal feed, particularly for the poultry and pig sectors in Brazil. Beyond the strike threat, conditions in Argentina are improving with rainfall expected in key agricultural regions, while Brazilian weather forecasts indicate clear skies that should expedite the soybean harvest, which had reached 36% completion by February 19.
In addition, the Brazilian government has postponed a planned increase in biodiesel blending mandates, which impacts the demand for soybean oil used in biodiesel production. This decision may lead to decreased soybean crushing rates, ultimately affecting soybean meal output. Estimates from S&P Global suggest Brazil will process 57.5 million metric tons of soybeans in 2025, yielding 23 million metric tons of exports, while Argentina is projected to crush 44 million metric tons and export 30 million metric tons of soybean meal.
In summary, Brazilian soybean meal pricing has gained a competitive edge over Argentine soy amid supply uncertainties and potential industrial strikes. As rainfall benefits Argentine crops and Brazil’s conditions favor harvesting, the dynamics of the soybean meal market are shifting. The government’s biodiesel blending decision further influences this landscape, underscoring vital changes in production and export forecasts for both countries.
Original Source: www.spglobal.com
