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Brazilian soybean exports plummet in January on ebbing supplies: sources

Brazilian soybean exports plummeted in January on ebbing supplies, as farmers sold almost all their old crop soybean stocks, market sources told S&P Global Platts Jan. 19.

Brazil exported 17,500 mt in the first half of January, compared with 630,000 mt shipped out in the same period last year, data released by Brazil’s foreign trade department showed Jan. 18.

According to analysts, Brazil is likely to export close to 290,000 mt in January, against 1.4 million mt in the corresponding period last year.

Due to harvest delay, Brazilian soybeans shipments are expected to pick up pace in February.

Brazilian soybeans planting, which typically begins in September, went off to the slowest start in a decade due to dry weather conditions. As a result, the crop harvest is likely to pick up pace only in early-February.

Brazilian soybean harvest for 2020-21 marketing year (February 2021 – January 2022) began at a lackadaisical pace, confirming the harvest delay for the season, agricultural consultancy AgRural said Jan. 18.

Brazilian soybean farmers have been able to harvest only 0.4% of the projected acreage, as of Jan. 14, compared with 1.8% last year, AgRural said.

The harvest delay and dismal Brazilian exports are expected to boost CBOT soybeans futures, which are trading at a seven-year high currently, analysts said.

CBOT soybeans March futures were trading at $14.0425/bu at 8:23 am GMT Jan. 19.

Brazil’s soybean farmers were selling at a fast pace this year, particularly in the first seven months, backed by the weak Real currency. They were able to offload most of their old crop soybeans — 99.5% as of Nov. 30 — which is seven percentage points above the five-year average.

Farmers are currently focused on domestic sales as the return on investment is greater compared with exports, industry sources said. Currently, Brazilian soybeans are sold domestically at an average price of close to $12-$13/bushel, up 20% on the year, according to the country’s price reports.

Soybean prices are slated to continue its rise in 2021 on tight supply, coupled with steady demand and delayed harvest, analysts said.

Echoing the sentiment, the US Department of Agriculture’s Foreign Agricultural Service said the Brazilian prices are likely to remain high in the coming weeks on harvest delay. Soybean harvest will not pick up in earnest until late-January, so domestic soybean scarcity will persist for at least another month and a half, FAS said Jan. 6.

According to AgRural, notwithstanding the harvest delay, Brazil is expected to produce an all-time high of 131.7 million mt of soybeans in 2020-21 due to good crop conditions across the region on favorable weather since mid-December.
Source: Platts

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