Soybean meal prices in Brazil fell sharply on October 26, 2023, reaching $384.92 per metric ton, marking the largest daily decline since April 16. On this day, prices dropped by $14.22 compared to the previous day, hitting their lowest level since August 24. These market developments occurred following the presidential elections and the reelection of Luiz Inácio Lula da Silva as President of Brazil.
Impact of Elections on the Soy Market
Lula da Silva's reelection raised concerns in Brazil's domestic markets, leading to a more than 10% increase in the value of the dollar against the Brazilian real. This rise in the dollar's value negatively impacted futures prices in the Chicago market, causing prices to drop by about 2%. Under these conditions, Brazilian farmers sold approximately 800,000 tons of soy on this day, a significant volume that is roughly equivalent to last week's sales.
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Outlook for Soybean Meal Exports
Despite the decline in FOB prices and improved competitiveness of Brazil in international markets, experts believe that the country's soybean meal export program will not see significant changes. Analysts from S&P Global Energy CERA predict that Brazil will export about 26.5 million tons of soybean meal in the 2025-2026 market year (January-December), with this figure increasing to 28 million tons in 2026-2027. Additionally, preliminary data from Brazil's foreign trade office indicates that in the first 11 working days of October, soybean meal exports reached 1.1 million tons, a 19% increase compared to the previous week.
According to analysts, if this trend continues, exports could reach around 2.3 million tons by the end of the month, while the current forecast for this figure is 2.2 million tons. With this export volume, Brazil is the second-largest exporter of soybean meal in the world after Argentina.
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