USDA report highlights Mexico’s soybean meal import surge

MEXICO – The United States Department of Agriculture (USDA’s) July 2024 Oilseeds: World Markets and Trade report reveals a dramatic surge in Mexico’s soybean meal imports. 

These imports are projected to rebound from a nine-year low in 2022/23 to over 2 million tons in 2024/25, marking the second-highest total ever recorded for the country.

Mexico’s reliance on imported soybean meal is driven primarily by limited domestic production and the substantial needs of its livestock feed industry. 

In the 2023/24 period, competitive prices for U.S.-supplied soybean meal have bolstered strong import demand. 

The previous decline in imports during 2022/23 was mainly due to high soybean meal prices caused by a severe drought in Argentina that reduced global supplies. 

However, as global soybean meal availability increased in 2023/24, prices fell, and demand in Mexico’s expanding livestock industry rose accordingly. 

Consequently, Mexico’s soybean meal imports have increased by 24 percent, while soybean imports have remained relatively flat.

Globally, the USDA has also raised its forecast for China’s soybean imports by 3 million tons to a record 108 million for 2023/24. 

This increase is driven by falling soybean export prices, pressured by robust supplies from South America. 

Brazil and Argentina are expected to see higher export volumes, with Brazil’s exports projected at 103 million tons and Argentina’s nearly 6 million tons for the October 2023 – September 2024 marketing year. 

Despite the increase in South American exports, U.S. soybean exports to China have dropped by more than 20 percent compared to the previous year.

With another large harvest anticipated in the Southern Hemisphere and competitive Brazilian prices, U.S. soybean exports are expected to face continued competition.

For the 2024/25 period, global oilseeds production is forecasted to increase to 686.1 million tons, primarily due to greater rapeseed production in Canada and higher cottonseed and peanut yields in the U.S. 

However, lower soybean production in the U.S. and reduced sunflower seed production in Russia have tempered the overall increase. Global oilseed trade is projected to rise by 500,000 tons, driven by higher Canadian rapeseed exports. 

Ending stocks are forecast to be slightly higher, with increases in rapeseed, peanut, and sunflower seed carry out offsetting lower soybean stocks. Despite the increased production, global crush utilization is expected to decrease due to lower sunflower seed usage.

Market prices have also seen adjustments. The projected U.S. season-average soybean farm price for 2024/25 is down 10 cents to US$11.10 per bushel. 

For 2023/24, the price is adjusted down 5 cents to US$12.50 per bushel. In June, U.S. soybean prices were under pressure due to favorable weather conditions, which led to a decline in soybean meal prices. 

However, U.S. soybean oil prices experienced an uptick, bolstered by higher exports and a rally in Malaysian palm oil prices. In Brazil, a weaker real encouraged farmers to boost soybean sales, increasing exports to China. 

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