According to new research by CoBank, export sales of new-crop soybeans are historically low as the U.S. entered the 2024-25 soybean marketing year Sept. 1.

The U.S. soybean export program also faces a number of obstacles in the weeks and months ahead, particularly with weaker, slower demand from China; however, continued weakness in prices will likely attract new export demand – especially with a record U.S. soybean harvest expected this fall, the report said.

“But a slow start to the export sales pace does not necessarily mean it will be a bad year for U.S. soybean exports,” said Tanner Ehmke, CoBank lead grain and oilseed economist, in his Aug. 29 report. “We see the potential for several developments that could bolster exports later in the year.”

In 2022 and 2023, overall soybean exports by volume fell by 15 percent, and have fallen by 24 percent since 2020, Betty Resnick, American Farm Bureau Federation economist, told Farm World.

“Of the seven markets that imported over 1 million metric tons of U.S. soybeans in 2022, five saw declining exports in 2023, including Egypt (-73 percent), Taiwan (-39 percent), Japan (-19 percent), Mexico (-19 percent), and China (-13 percent),” she said. “Comparing 2023 to 2024 year-to-date exports through July, China, Japan and Taiwan have continued to see declining exports.”

The report said the peak shipping period for U.S. soybeans runs from September to December, with typically more than half of all shipments for the season occurring in those four months before the arrival of the South American harvest.

The report added China typically accounts for the majority of U.S. soybean export sales. But following record imports from Brazil, Chinese bookings of new-crop U.S. soybeans are among the lowest levels in two decades. Total U.S. new-crop export sales are also the lowest since 2008, aside from the trade war low in 2019.

Ehmke said four key factors that could reverse the lackluster pace of soybean exports are: A smaller-than-expected South American soybean harvest; a bump in European demand for soybeans from non-deforested (a wide area of trees that have not been cleared) acreage; falling interest rates in the U.S.; and a recovery of the Chinese economy, adding these “all fuel increased export demand for U.S. soybeans in the year ahead.”

Currently, the USDA is forecasting a record Brazilian soybean crop of 169 metric tons. However, the report said low prices may discourage Brazilian farmers from expanding soybean acreage as planting begins in the coming weeks.

Resnick said one major issue for U.S. soybean exports in 2024 has been the weakening Brazilian real (Brazil’s currency) since the start of the year.

“While its weakening has roughly plateaued since July, it is down over 14 percent, compared to the U.S. dollar from the beginning of the year,” she said. “On currency alone, this makes Brazilian soybeans cheaper to buy than U.S. soybeans.

“On the horizon, we are closely monitoring the potential dockworker strike that may start Oct. 1 and impact all ports from Maine to Texas,” she added. “If the largest soybean export ports go offline at the beginning of peak soybean export season, it would pile on one more hurdle for farmers already facing a down agricultural economy.”

Grant Kimberley is a sixth-generation farmer who farms with his family near Maxwell, Iowa. When asked about the historic drop in U.S. soybean export sales shown in this CoBank report, he told Farm World, “I think this is combination of factors. Brazil and Argentina grew very large crops. I believe a record for Brazil this year. So, we faced stiff competition from the other global suppliers.

“In addition, China’s economy continues to be sluggish and underperform, hurting feed demand from their livestock industry,” added Kimberley, who also is Iowa Soybean Association senior director of market development, and Iowa Biodiesel Board executive director. “The U.S. strong dollar has also made our exports more expensive to foreign buyers this past year.”

He said, however, “I think we will see U.S. soybean exports increase due to the lower prices this year. It will also help if parts of Brazil and Argentina continue to experience dry weather and planting delays due to La Niña (the periodic cooling of ocean surface temperatures in the central and east-central equatorial Pacific).

“If they are delayed in planting, it will extend the U.S. export window later into next year. If the weather remains dry in parts of South America, it could reduce overall production somewhat,” he said. “Although, we do still expect an increase in planted total South American acres and hectares (which is equivalent to 2.471 acres), just not as much as the past several years. Lastly, if the Chinese and world economies can improve over last year, it could increase overall feed demand.

“All of these things might take some time, though,” he added. “Things could look better by this winter if some of those potential things line up and fall into place.”