A devastating drought in Argentina has resulted in a huge drop in their soybean production this past year as USDA this month pegged their 2022/23 crop at 25.0 million tonnes, the lowest figure since the 1999/2000 season with the yield at 1.67 metric tons (mt) per hectare (ha), shockingly low and the worst since 1.63 mt/ha back in the 1988/89 season.
As a result, their soybean processing industry has taken a massive hit of no small consequence for the world's largest soybean meal and soybean oil exporter.
In fact, the strength of soybean meal prices at the CME is attributed to the significant reduction in Argentina's exports as other countries like the United States and Brazil are experiencing higher demand for soybean meal exports.
This chart shows exports of soybean meal in 1000 tonnes from the three largest world shippers which includes Argentina, Brazil and the U.S. on the left-hand axis and each of their percent of global trade on the right-hand axis.
Back in the 2016/17 season, Argentina's exports of soybean meal peaked at 31.3 million metric tons (mmt), accounting for almost 48% of all soybean meal exported in the world.
This season Argentine SBM exports is a mere 21.20 million tonnes, their lowest figure in 18 years and will account for only 31.9% of global trade, the lowest percent since the 1997/98 season.
This has benefited both the U.S. and Brazil as the latter for the first time ever will ship out more soybean meal than their South American neighbor, exporting 21.5 million tonnes and is now the world's largest seller accounting for an all-time high share of 32.3% of the market.
The U.S. has also picked up business with our exports pegged at 12.9 million tonnes, the highest ever with our share of the global SBM export market also at an all-time high of 19.4%.
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