High supply puts pressure on the soybean meal market.

The high supply of soybean meal is expected to keep price pressure on in the coming months, in a scenario where domestic demand remains limited. According to data from Itaú BBA Agro, the combination of unfavorable crushing margins and excess product is already causing industries to consider bringing forward maintenance shutdowns or even reducing the processing rate, which also impacts the oil and biodiesel markets.

Although Brazilian soybean meal exports remain strong, they have not been sufficient to reduce the surplus of product in the domestic market. During the same period, Chinese demand for Brazilian soybeans remains high, driven by the trade impasse with the United States. If this scenario continues, the trend is for the grain to appreciate in Brazil, further pressuring crushing margins and reducing the domestic supply of soybean oil—a factor that could increase the cost of biodiesel.

In the international arena, soybean oil in Chicago is expected to remain volatile, reflecting uncertainties surrounding US biofuel policy and the recent Environmental Protection Agency (EPA) decision on exemptions for small refineries. Nevertheless, US crushing margins remain positive, supporting the growth of processing in the country.