March 7, 2013

 

 

US farm officials are expecting a strong autumn competition between Brazilian and US soy exports, as the South American nation attempts to recover from a poor start to 2012-13, with shipments affected by logistical issues.

 

While the USDA has reduced their forecast of Brazilian soy crop to 82.5 million tonnes, they are standing by an export forecast of 39.0 million tonnes for 2012-13.

 

The export figure represents a record, by a distance, even though coming in 875,000 tonnes below the USDA's official forecast, on the basis of a February-to-January marketing year.

 

The report also follows the release of government data showing that Brazilian soy shipments, affected by "deficient port logistics", poorly maintained roads and rail bottlenecks, had fallen below 960,000 tonnes last month from 1.57 million tonnes the year before.

 

The USDA said in a report: "Traders hope to offset the slow early export season with stronger exports in September and October," a period when US supplies would typically be building with the onset of its own harvest.

 

The briefing also noted the need for Brazil's supplies to be "price competitive with the upcoming US crop".

 

Brazil's price keenness was being assisted by the weakness of its currency.

 

The report comes amid continual orders for US soy, despite their thin supplies and relatively high prices, with demand attributed largely to the difficulty in obtaining soy from Brazil due to ship waiting times at ports, estimated at about 60 days.

 

Chris Mahoney, the director of agricultural products at Glencore, underlined the extent of Brazil's infrastructure shortfall, flagging "tremendous waiting times" in the port of Paranagua, which, he estimated, have risen from 20 days at peak time in 2011 to 45 days last year.

 

In the latest evidence of the clamour for US soy, the USDA revealed the sale of 330,000 tonnes of soy crop in 2012, to an "unknown" foreign buyer, suspected to be Chinese.

 

"Soy crush margins throughout the world are very positive and crushers do not want to miss out on any of these positive margins," Darrell Holaday of Country Futures said.

 

"Chinese crushers do not want to hear about shipping delays out of Brazil. That is why they are pushing to buy US soy. "

 

The US has already shipped more than 1.1 billion bushels of soy in 2012-13, and has commitments for a further 200 million bushels, meaning that half way through the season, it may wrap up a full-year export programme which the USDA has estimated at 1.35 billion bushels.

 

The strong demand has raised ideas of the US being forced to turn to South American imports late in the season to tide crushers over while they await the next American harvest.

 

The USDA releases its latest Wasde crop report, at which the US soy balance sheet, and estimates for Argentine and Brazilian crops, are expected to be the highlights.

 

The USDA's current estimate is 83.5 million tonnes, with Conab's at 83.4 million tonnes.

 

Lanworth has trimmed to 80.8 million tonnes in its forecast for Brazil's soy harvest.