Renata Cardarelli: Hello and welcome to Market Talks. I'm Renata Cardarelli, editor of Argus Brazil Grains and Fertilizer publication. I'm here with Nathalia Giannetti, agriculture specialist and one of those responsible for the Argus AgriMarkets and Argus Brazil Grains and Fertilizer reports.
Today we'll be talking about the fundamentals of the Brazilian soybean meal market and the launch of an Argus price indicator for this market. Welcome, Nathalia.
Nathalia Giannetti: Hi, Renata. Hi, everyone. It's a pleasure to be here today.
RC: First of all, I'd like you to explain to us what this new price assessment is.
NG: The new Argus price assessment for the soybean meal market are the port differentials on the FOB-based Paranagua paper market. Because this is a paper market, it doesn't involve physical volume transactions. They happen based on future contracts that take CBOT futures as a point of reference.
Offers and bids are reported as a premium or a discount to one of CBOT contracts, which can vary according to its settlement for the Paranagua paper market. As the name itself suggests, the Paranagua paper market also has the ports of Paranagua as a reference. This is one of the largest Brazilian ports and one of the main ports for soybean meal exports.
Deals also take place on a FOB basis, meaning that all costs up to shipment are covered by the seller. So the price of the futures contract that is being negotiated includes logistical costs after shipment. This market is also known as the port differentials market or basis because it is a port-based differential relative to CBOT.
But the Argus soybean meal assessment will also include the final price value in addition to the differentials.
RC: Nathalia, how relevant is this assessment?
NG: To discuss the relevance of the soybean meal assessment, we first need to go back a bit in the production chain. Brazil is the world's largest soybean producer and exporter. Soybean production totaled a record of 171.5mn [metric] tons (t) in the 2024-25 crop. Of this total, almost 107mn t were exported.
Both estimates are from the national supply company Conab, that is our government source for agricultural data. Despite most of these volumes being geared to international markets, a significant share remains in the country to attend the domestic market. In the 2024-25 season, Conab estimates that more than 60mn t of soybeans were consumed domestically. Most of this domestic demand comes from the soybean crushing sector, which consumed 58mn t in the last season, according to USDA data. It is through crushing soybeans that soybean oil is obtained, which is consumed on a large scale by the biofuel industry. And of course, this is how soybean meal is obtained.
Brazil is the third largest producer of soybean meal, behind China and the US. As for exports, Brazil is the second largest in the world, behind Argentina. About half of the total meal produced each year goes to the export market. So it is in this context that Argus publishing a soybean meal indicator for the export market is very relevant.
RC: That's interesting, Nathalia. And how much soybean meal did Brazil export in 2025, and which were the main buyers?
NG: The National Association of Exporters estimates that Brazil exported a record high of 23.1mn t last year. This large volume is because of a much higher global demand for soybean meal and, of course, thanks to more available supply. Brazil produced a record of 45mn t of soybean meal in the 2024-25 season. This follows a higher soybean supply and stronger demand for soybean oil from the biofuel sector. As for the largest buyers, Asian and European countries are the main buyers of Brazilian soybean meal.
As for the largest importers of Brazilian soybean meal, there are Thailand, Indonesia, France, the Netherlands and Spain. These countries are also traditionally large importers of soybean meal in a global context.
RC: And what's the usage of the soybean meal, Nathalia?
NG: Soybean meal is rich in nutrients, amino acids and especially protein, with a content that usually varies between 44-48pc. This makes soybean meal a very attractive product for animal feed production.
RC: How would you describe Brazil's animal feed sector?
NG: In Brazil, the animal feed sector has a large share, the largest share, actually, of the soybean meal market. Soybean meal is used to attend the demand to feed poultry, swine and cattle. When we talk about the share of each commodity in the animal feed production, soybean meal accounts for 20pc of the Brazilian animal feed production, only after corn share.
RC: What's the outlook for 2025-2026 season, Nathalia?
NG: The first estimates for the 2025-2026 season already point towards soybean meal production growth. This is due to forecasts of another record soybean production and higher demand for soybean crushing because the demand for biodiesel is also expected to rise. Soybean meal demand should also grow, both internationally and in the domestic market, but not at the same rate as supply. This has been a long-standing problem for the sector. The supply surplus keeps soybean meal prices pressured and hurts crushing margins.
Crushing margins are the difference between the revenue from crushing final products, such as soybean oil and soybean meal, and the feedstock's cost, which is soybeans in this case. The result of this calculation indicates the potential profit for crushers and helps in decision-making. With meal prices under pressure, it is soybean oil that usually pays the bill for this operation, and this makes paying the bill much harder for crushers.
RC: Thank you for joining us, Nathalia. For sure, this will be a very important assessment. As you said, Brazil is the third largest producer and second exporter in the world, so market participants for sure will appreciate to have this assessment. And we'll keep following the soybean meal market in Brazil.
This and other episodes of our podcasts are available on the Argus website. We'll be back soon with another edition of Market Talks. See you!
