Soybean prices have experienced a notable decline throughout 2024, and the current market conditions suggest that they will remain below last year’s levels through the first quarter of 2025, driven by a robust global supply.
A key factor contributing to this price drop is the improved supply outlook, which contrasts sharply with last year’s underperforming harvests in Brazil and Argentina. Projections for this year indicate strong harvests, leaving little room for price increases beyond $10 per bushel on the Chicago Board of Trade. For context, January 2024 futures contracts were averaging around $12 per bushel.
The strong yields from U.S. crops have further pressured prices. Data from Valor Data reveals that soybean prices have fallen more than 25% in the past 12 months.
“We are looking at a favorable supply picture for 2025,” said Francisco Queiroz, an analyst at Itaú BBA’s Agro Consultancy. “January weather conditions are expected to mirror those of December, indicating promising production prospects.”
Ana Luiza Lodi, a grain market intelligence specialist at StoneX, concurred, emphasizing that the abundant supply of soybeans will continue to weigh on international prices. “This supply surplus makes it unlikely for prices to rebound. Record harvests in Brazil and excellent yields in Argentina are set to ensure a steady surplus,” she stated.
The U.S. Department of Agriculture (USDA) backed this forecast in its December supply and demand report. According to the USDA, Brazil’s 2024/25 soybean harvest is expected to reach 169 million tonnes, up from 153 million tonnes in the previous cycle. Argentina, meanwhile, is projected to produce 52 million tonnes, compared to 48.21 million tonnes last year.
With supply for 2025 largely assured, the prospect for price increases hinges on demand growth. Queiroz suggested that global demand could increase by 5% in 2024/25, double the average for the period. However, if this demand fails to materialize, it could lead to higher stockpiles, further suppressing prices.
Vlamir Brandalizze, an analyst at Brandalizze Consulting, pointed to May as a critical period for the soybean market. He explained that if soybean prices fall below $10.20 per bushel, U.S. farmers may opt to shift their acreage to corn, potentially triggering a price recovery in the latter half of 2025.
Despite the price decline, farmers have been proactively selling their 2024/25 harvest at a brisk pace. In an effort to avoid the usual pressure during harvest, farmers, particularly in Brazil, are eager to sell in advance due to a lack of adequate storage facilities.
Brandalizze Consulting reports that farmers have already pre-sold 35% of their soybeans ahead of harvest, compared to just 20% at the same time last year and a ten-year average of 30%. “Farmers are concerned about the prospect of a bumper crop, so they are selling early,” Brandalizze explained. “If this turns into a record harvest, we’ll likely see substantial price drops in the first quarter after harvest.”
Brandalizze forecasts that soybean prices could fall by 10% to 15% below current levels during the South American harvest. As of late December, soybean contracts for April and May 2025 delivery ranged from R$130 to R$131 per bag at the ports. The July contract was priced at R$135, while the August contract stood at R$137 per bag.
Meanwhile, corn sales have not kept pace with soybean transactions. With the second planting season approaching, farmers have sold less than 20% of their expected corn output in advance, compared to the historical average of 30%.
“Corn farmers are holding off on sales, anticipating price increases,” said Brandalizze. Corn prices at the ports have averaged R$75 per bag, with July delivery contracts trading at R$70 per bag.
The ongoing demand for corn, driven by the increased use of corn for ethanol production and rising needs for animal feed following last year’s sugarcane fires, has spurred concern over low corn stocks. “We’re ending the year with limited corn inventory and will rely heavily on the upcoming crop,” Brandalizze concluded, adding that the next corn harvest must match the 2024 planting area to keep supply in balance with demand.
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