Europe is expecting a record year for soybean output, according to an announcement from Donau Soja one month out from the start of the harvest.
The European harvest is expected to reach a total of 11.5 million tons, said the organization, which is dedicated to supporting European soy and plant protein supply chains.
The forecast volumes would represent an increase of more than 16% on 2022, when the total harvest was 9.9m tons.
The biggest gain in harvested European volume in 2023 is expected in the EU-27, both in absolute and percentage terms: "In EU countries alone, the area under soybean cultivation will reach about 1.1m hectares."
Austria expects a harvest increase of 15% this year, while Germany anticipates having a hike of 6% in its soy output. Italy, Romania, and Hungary are also forecasting massive harvest increases.
"Soybean output in the EU-27 is projected to reach an all-time high of 3m tons, up 33.6% versus 2022 due to higher yields."
The forecast harvest in Ukraine is particularly promising this year, said Donau Soja, with it reporting that both the area of soy cultivation and the yields per hectare have expanded. "Overall, the area under cultivation grew by 20% to 1.8 million hectares despite the war."
Weather conditions
The strong increase in harvest volumes in the EU is mainly due to the favourable weather conditions and increased precipitation this year compared to widespread dry periods in 2022 and the associated crop losses.
Those developments are likely to result in higher than five-year-average yields in most soybean producing regions in Europe this season, noted a Donau Soja market report.
However, the analysts said yield potential has been damaged by storms in some regions such as Northern Italy or Serbia.
Reducing EU dependency on soy imports
In total, the demand for soy in the EU is about 30m tons annually; with this upcoming harvest, a third of those volumes can now be produced in Europe instead of relying on imports from overseas, claimed Donau Soja.
The prices for European GMO-free soy are also moving in a positive direction, said the Vienna, Austria-based group. In recent months, they have fallen to a historic low compared to GM soy from the US or South America. Now is a good time for the European industry to make the switch, commented Matthias Krön, Donau Soja president.
"EU soybean prices at the Bologna Exchange rose to €493/t by the end of July, +6% vs one month earlier. The EU and international prices were driven up in July by hot weather in the US.
"HP non-GM soymeal was offered at €30-35/t more than GM soymeal in Northern Germany during mid-August. Non-GM soymeal premiums in the EU have remained relatively stable and at a historically low level over the [past] three to four months."
Non-GM premiums under pressure
Over the last six months, non-GM premiums have been under pressure, primarily as a result of the abundant non-GM soy imports from Brazil and Ukraine throughout the 2022/23 marketing season; and low demand for non-GM soymeal in the EU, reads the Donau Soja publication.
Old crop non-GM soymeal from EU crushers is almost at an end, according to the review.
"The summer period is usually the month for yearly maintenance and the 'switch plants' prepare to receive sun seeds in August. The stocks of meal will be used to cover the sales until new crop, and it will be difficult to add volumes on top of what the crushers have forecast to potentially sell. Since the availability of soybeans has been very low in the last months, it doesn’t appear that crushers will carry over old crop stocks, especially considering that Europe will have a lot more to sell from October onwards.
"The supply of non-GM soybeans for the new crop is high. Many Ukrainian big agro-holding are waiting to receive bids from buyers for as long as the logistics are bookable, but the buyers are not active due to the low demand for processed soy products from October onwards."
Brazilian market
Brazilian farmers, remarked the analysts, continue to be disappointed by the low premiums for non-GM soybeans in the 2022/2023 marketing year, discouraging them from sowing non-GM beans for the coming 2023/24 marketing year.
"The purchase of seeds for the new campaign has started and will soon be complete. So far, the sales of non-GM seeds to farmers have been extremely low. Brazilian farmers grow non-GM beans exclusively for the EU market and if the market is no longer interested in non-GM, they will skip or drastically reduce the program."