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Argentina faces a soybean production crisis due to drought, compelling record imports from neighboring countries. With crushers running out of soybean stocks, Brazil surpasses Argentina as the leading soymeal exporter. US, driven by biofuel demand, anticipates record soymeal exports, intensifying competition with Brazil. Argentine farmers, wary of inflation, reduce soybean sales, impacting crushing volumes. As global soymeal prices surge, Argentina's industry faces challenges, while the US aims for a 20% share in global exports in 2023-24.

Highlights

The severe drought in Argentina has upended the global soybean trade landscape, triggering a decline in production to 20 million MT. The country is grappling with the need to import soybeans from Paraguay, Bolivia, and Brazil to sustain its crushing plants, with idle capacity looming. Brazil's ascendancy as the top soymeal exporter, coupled with the US's surge in soymeal exports driven by biofuel demand, marks a significant shift. Argentina's economic uncertainties, including high inflation and currency depreciation, have led farmers to withhold soybean sales, exacerbating the crushing volume reduction.

Despite Brazil's increased crushing volume, it cannot compensate for Argentina's decline, causing a tightening of global soymeal prices. Argentina's industry faces a precarious situation, with crushers contemplating suspension from November, contributing to the anticipated 21% YoY decline in soymeal exports. Conversely, the US is on track for record soymeal exports, covering 40% of the USDA's 13.9 million metric ton prediction for 2023-24.

* Argentina's soybean production plummets to 20 million MT due to severe drought.

* Record soybean imports are necessitated to sustain Argentina's crushing plants.

* Brazil surpasses Argentina as the world's top soymeal exporter.

* US anticipates record soymeal exports, driven by the biofuel craze.

* Argentina faces a 21% YoY decline in soymeal exports, reaching 21.1 million MT.

* Argentine farmers withhold soybean sales amid economic uncertainties.

* Crushing volume in Argentina decreases by 8.14 million MT YoY.

* Brazil experiences a marginal increase in soybean crushing volume.

* Global soymeal prices surge in the past two weeks.

* US soybean meal exports reach a nine-year high, covering 40% of the USDA's prediction.

* The US aims to account for 20% of global soybean meal shipments in 2023-24.

* Argentina projected to account for 34% of global meal exports in 2023-24.

* Brazil edges Argentina in the previous cycle, becoming the top meal exporter.

* Argentina's poor performance expected to impact the first half of the global 2023-24 season.

* Economic uncertainties in Argentina contribute to a widening spread between exchange rates, affecting soybean sales.

Conclusion

The global soybean market is entering a period of uncertainty with Argentina's production challenges and changing trade dynamics. As Argentina's soybean crushers face idle capacity, and the country grapples with economic woes, the impact on soymeal prices is pronounced. The surge in demand for US soymeal, driven by biofuel trends, and Brazil's emergence as the leading exporter, suggest a competitive market. The widening spread between Argentina's official and black market exchange rates adds to the complexity, contributing to stagnating soybean sales. Given these factors, a further rise in global soymeal prices is anticipated in the coming months.

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