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Soybean exports to Europe increase in 2018’s first half

ST. LOUIS, Mo. — The USDA reported U.S. exporters shipped more soybeans to Europe from January to June of this year, than during the first half of any year since 2002. That upward trend continued in July, according to trade data released by the European Union last week.

The U.S. trade data released August 3 showed 2.4 million metric tons shipped to Europe from January to July, or about 90 million bushels. The increase came as U.S. exporters sought to offset lost soybean sales to China and as European importers took advantage of comparatively cheaper U.S. soybeans.

July is the beginning of Europe’s soy marketing year, and the U.S. soybean market share rose from 9 percent during the first five weeks of the EU marketing year, in July 2017, to 37 percent this year. The EU received just over 13 million bushels of U.S. whole soybeans in July.

The EU data release is part of an EU commitment to provide bimonthly updates on soybean trade, a result of trade talks between the United States and EU. "We expressed our willingness to import more soybeans from the United States and this is already happening,” said Phil Hogan, EU commissioner for agriculture.

Soybean marketing experts are looking to the EU as the largest potential market to offset soy sales lost to China – the result of China’s July 6 tariff on soybeans. “The group to look at is going to be the EU,” said Rich Nelson, chief strategist at Allendale, Inc.

In 2017, China imported a monthly average of about 2.6 million metric tons, or 98 million bushels. Although that is more than seven times the amount imported by the EU in July, China’s imports from the U.S. are historically lowest in the late-spring and summer months.

So, increases to the EU could shore up future market prospects during the busy U.S. harvest and fall/winter export season. “The EU certainly will be a big buyer of U.S. product, possibly moving up into that 300, 350 million-bushel range for the new-crop season,” said Nelson.

“But as it stands, it probably won’t offset all of the potential decline that could be seen out of China.”

The key destination for whole U.S. soybeans to Europe is the Netherlands, with its large grain receivers and ports. But the USDA noted sharp increases to Italy, Spain, Portugal and Poland.

Soybean meal exports to Europe are also on the rise. From January-June, the U.S. saw big meal volume increases to Spain, Portugal, Belgium-Luxembourg, Italy, the United Kingdom, Ireland and Poland. That same story carried through July, according to EU data released August 2.

That report showed 185,000 metric tons of soybean meal imported from the U.S. for July, a big jump from about 5,500 tons of soy received in the EU during July 2017. “The U.S. is now supplying 13 percent of EU soy meal imports, compared to 0.3 percent in July 2017,” stated the EU report.

Poland is showing good promise for increased U.S. meal shipments. The USDA reported 54,000 metric tons of soy meal shipped to Poland from January-June, the most since 2013.

“Soybean meal demand remains strong because it is the best protein source for poultry feeding rations, and Poland is the largest broiler and turkey producer in the EU,” said Piotr Rucinski, USDA agricultural specialist in Warsaw, in a July report.

Lower meal shipments from Argentina are factoring into the U.S. gain, he said.

Long term uncertain

Recent increases in trade with the EU and other destinations are unlikely to translate to significantly higher soybean prices in the Corn Belt, because of lost trade with China, according to a report published August 2 by two veteran agricultural economists.

“Even if trade disputes ended today, forces likely have been put into place that will result in expanded acres in South America and elsewhere. If trade disputes continue, prospects of expansion outside the U.S. grow, along with attendant long-term negative impacts on U.S. prices,” wrote Gary Schnitkey of the University of Illinois and Carl Zulauf of The Ohio State University.

Such outlooks leave the soy industry looking for new export possibilities, including free-trade deals. The American Soybean Assoc. announced August 2 it was joining Farmers for Free Trade, which already includes the American Farm Bureau Federation and National Pork Producers Council.

FFT is led by former senators Richard Lugar and Max Baucus. “During a period of uncertainty caused by the imposition of new tariffs and declining farm income, we are especially glad to welcome soybean farmers to this bipartisan cause,” Lugar said.