May 11, 2009

Brazilian soy exports should remain fast and furious in May and for the rest of the year despite Chinese buyers taking more of a back seat.

Soy exports rocketed in April, principally because of the Chinese continuing to buy strongly and the absence of Argentina selling in the market after its smaller-than-expected crop, according to industry participants. They said the lack of Argentine beans stimulated buyers -- especially the Chinese -- to purchase more products in Brazil.

Brazil's Foreign Trade Ministry pegged Brazil's soy exports at a record-breaking 4.5 million metric tonnes for April, compared with 3.3 million tonnes a year ago.

A chief trader at a US soy exporter said that the actual figure could be closer to 4.9 million tonnes in April if you count the amount of beans shipped per vessel.

The booming soy export trade is set to continue in May and for the year, the trader said.

Such soy buyers as Cargill, Bunge and ADM have been booking large volumes of beans in Brazil. "Around 4 million tonnes of soy is already booked on vessels for May [shipment]," the trader said.

Soy exports should reach up to 4.3 million tonnes in May, depending on the weather, he said.

But Chinese buyers -- the No.1 importers of Brazilian soy -- haven't been buying Brazil's soy for the last few weeks because of price, sources said.

The trader said Chinese purchased a lot of beans two weeks ago at around US$340 per tonne at Paranagua port, Brazil's main grains port. But with soy prices currently hovering around US$430 per tonne, this is too expensive for them, he said.

July soy was at US$11.02 a bushel Friday on the Chicago Board of Trade, or CBOT, down slightly from its eight-month highs earlier in the week.

"They are likely to re-start buying when soy prices dip to US$340 per tonne," he said.

Pedro Collussi, a grains analyst at Brazilian agricultural consultancy AgraFNP, said that Brazilian soy exports should remain strong through the year.

Collussi said that Brazil should export 25.6 million tonnes of beans in 2009, compared with 24.5 million tonnes in 2008, due to the smaller Argentine crop and strong buying from China.

He said that between 13.5 million tonnes and 14 million tonnes of soy should go to China.

Steve Cachia, grains analyst at Cerealpar, said that one barrier to Brazilian exports will be its smaller soy crop this year.

Brazil's soy crop is 4 percent down at 57.6 million tonnes in 2008-09, compared with 2007-08, according to National Commodities Supply Corp, or Conab. The signs are that May will continue to see strong exports, with a good number of vessels waiting at the ports, Cachia said. But if Brazil continues exporting at this pace, a shortage of beans could be seen toward the end of the year, he said.

Brazil is the world's No. 2 soy producer after the US.