Home / Shipping News / Dry Bulk Market / Brazil’s soybean exports slump in July amid stock hoarding

Brazil’s soybean exports slump in July amid stock hoarding

Brazil’s soybean exports fell in July as the hoarding of stocks by farmers raised supply concerns, sources told S&P Global Platts Aug. 3, which is expected to support demand for US beans.

Brazil, the world’s top soy supplier, exported 8.66 million mt of soybeans in July, down from 11.12 million mt in June and from 9.95 million mt in July last year, the country’s Secretariat of Foreign Trade, or Secex, said in a report Aug. 2.

Daily export shipments averaged 40,000 mt lower on the year at 393,897 mt, Secex said in the report.

Soybean exports over January-July were estimated at 66 million mt, down 3% on the year, the data showed.

With a delayed harvest in the current marketing year 2020-21 (February-January), Brazil’s soy exports in June and July had been expected to emulate the record levels of April and May, but the reluctance of oilseed farmers to sell their stocks since early June has put the brakes on the country’s exports.

Soybean farmers in Brazil have resorted to stock hoarding amid volatile prices, market analysts said. The average domestic price was seen at Real 155/60 kg ($30/60 kg) July 10, down Real 7/60 kg on the month.

Brazilian soybean prices typically rise in the fourth quarter as the stocks deplete.

So, the farmers are hoping for a spike in prices, especially as the US soybean production forecast for marketing year 2021-22 (September-August) remains precarious amid persistent dry conditions in the US Midwest.

Exports to China decline

Brazilian soybean exports to China, the world’s largest soybean importer and Brazil’s top market, have declined 5 percentage points on the year to 68% in 2021 calendar year, Secex said in teh report.

Crushers in China, which have been grappling with slim margins since February, have become price-sensitive and would rather wait for margins to improve before purchasing soybeans in bulk, analysts said.

The China soybean gross crush margin averaged at minus $7/mt for August, swinging from the plus $28/mt averaged in January, Platts data showed.

Brazilian farmers are also keeping close tabs on the dry weather concerns in the US, their main export competitor, analysts said. Crop ratings in North America have remained at 60% good-excellent, compared with 73% last year as the Midwest, especially the northwestern parts, await substantial rainfall to improve extremely dry soil conditions.

Poor US soybean crop quality typically signals lower-than-expected MY 2021-22 output, which is currently seen at 120 million mt, according to the US Department of Agriculture’s latest forecast.

In contrast, Brazil is forecast to produce a record 144 million mt of soybeans in its MY 2021-22 and export an all-time high volume of 93 million mt, according to the latest USDA projections.
Source: Platts

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping