High supply puts pressure on soybean meal market

The high supply of soybean meal is expected to keep pressure on prices in the coming months, amid a scenario where domestic demand remains limited. According to data from Itaú BBA Agro, the combination of unfavorable crushing margins and excess product is already causing industries to consider bringing forward maintenance shutdowns or even reducing processing rates, which also impacts the oil and biodiesel markets.

Although Brazilian soybean meal exports remain strong, they have not been sufficient to offset the surplus in the domestic market. During the same period, Chinese demand for Brazilian soybeans remains strong, driven by the trade impasse with the United States. If this situation continues, the trend is for the grain to appreciate in Brazil, further pressuring crushing margins and reducing the domestic supply of soybean oil—a factor that could increase the price of biodiesel.

On the international scene, soybean oil prices in Chicago are expected to remain volatile, reflecting the uncertainties surrounding biofuels policy in the US and the Environmental Protection Agency's (EPA) recent decision on exemptions for small refineries. Even so, North American crush margins remain positive, supporting the growth of processing in the country.