John Deere combine in soybean field

(Photo: Iowa Soybean Association / Joclyn Bushman)

Four market movers to watch in 2024

December 21, 2023 | Kriss Nelson

Markets and models could impact your profit opportunities in 2024. With a new year approaching, we asked Mac Marshall, United Soybean Board vice president of market intelligence, to provide four areas that could affect your marketing plans in the coming year.

1. Crush expansion and soybean meal exports

There has been a wave of crush expansion this marketing year, and with that comes a need for soybean meal consumption.

“We have been crushing a lot more beans, seeing a record crush for October and highest November on record,” says Marshall.

USDA reported 189.774 million bushels in October and 189.038 million bushels of soybeans were crushed in November.

Iowa will continue to contribute to soybean crush numbers with two new facilities: Shell Rock Soy Processing, which came online last January, and Platinum Crush, which is expected to open in spring 2024.

With the wave of crush expansion, there is hope soybean meal exports will also climb.

Marshall says soy meal exports are fresh off a record-setting 2022/2023 marketing year at nearly 14 million tons.

“We are already 20 percent ahead of last year’s pace through early December,” he says. “Soybean meal export systems are coming together and working as they should.”

2. Argentina

Argentina has traditionally been the world’s largest soybean meal and oil exporter on a volume basis, mainly due to its export tax structure.

“With a new president in place and the reintroduction of higher tax rates on agricultural products coming out of Argentina, it has been challenging for them,” says Marshall.

The U.S. has been working toward making our soybean meal more cost-competitive in relation to Argentina by improving and adding infrastructure, making the product more available in terms of transportation, and therefore exporting more soybean meal to countries historically served by Argentina, like Indonesia. This includes AGP’s expansion and upgrade of its export facilities at the Port of Grays Harbor in Aberdeen, Wash.

“Some of the shifts in Argentina on the export side with their new administration create an interesting environment where that cost competitiveness piece could take off,” says Marshall. “We will continue to watch what comes out of Argentina.”

3. South America

“Naturally, all eyes are on South America this time of year,” says Marshall. “We are trading in a weather market right now.”

When there is timely rain in Mato Grasso, U.S. soybean markets will tend to price down as South America continue to fight drought conditions.

Although there have been reports of replanting soybeans in many parts of Brazil, that only takes down yield potential for that country.

“The fact of the matter is more area went into production this year, and they have continued to increase their area that is under cultivation for soy since 2006,” says Marshall. “They are still projected to produce a record crop even if it’s not the 160-plus million metric tons they expected at the start of the year. This will continue to influence markets in the coming months.”

4. GREET model

Last week, the U.S. Treasury Department released guidance regarding implementing the Inflation Reduction Act’s sustainable aviation fuel (SAF) tax credit. According to a news release from the Renewable Fuels Association, the guidance clarifies that a soon-to-be-updated version of the Department of Energy’s GREET model will be the amount of methodologies used to determine eligibility for the tax credit.

“Moving to this model presents greater opportunities for crop-based feedstocks, including ethanol to jet as well as soybean oil for use in SAF,” says Marshall.

However, Marshall noted how this will work within the Renewable Fuel Standard is unclear.
“There is still a lot to uncover there, but I am more excited about SAF than I was two weeks ago.”