February 15, 2021

 

Soybean harvest delays in Brazil prompt buyers to turn to the US

 


Soybean harvest delays in Brazil, the biggest soybean producer in the world, are pushing buyers led by China to turn to the United States longer than usual in 2021, according to traders and government data, Reuters reported.

 

A sustained demand for soybeans from the US is hastening a record drawdown of U.S. supplies and may push soybean prices higher during a time of increased food inflation, especially as countries stockpile staples during the COVID-19 pandemic.

 

Soybean futures saw a 4.5% rally last month to hit a 6-1/2-year high following tight global soybean supplies concerns, as China increased its purchases of the commodity in the past few months.

 

Brazil normally harvests its soybeans between January to March, but that has been delayed by a drought in 2020 that slowed paintings and rainfall at harvest time.

 

Brazil trade data showed the country's soybean exports last month were 28 times lower compared to the year prior at 49,500 tonnes, not enough to fill up a single vessel.

 

On the other hand, the United States inspected about 8.9 million tonnes of soybean for shipment in January, the biggest on record based on United States Department of Agriculture (USDA) data.

 

Anec confirmed Brazil shortages could benefit competitors. The Brazilian group counts grain exporters Bunge and Cargill among its members.

 

Sergio Mendes, Anec director said low soybean supplies in Brazil have extended the export window for the US.

 

Anec said soybean shipments from Brazil could be only 6 million tonnes, lower than the projected 8.5 million tonnes.

 

One major trader told Reuters that Brazil's supplies may only start to normalise by March. This could be an issue for ports in Brazil as it would compete with sugar during March and April for finite loading capacity.

 

The trader, who spoke anonymously, said it is tapping grain suppliers in Argentina and the United States, with most leaning on the latter as Argentina's soybean harvest doesn't begin until March.

 

Soybean importing countries like China have increased purchases of oilseeds and grains to protect against shipping disruptions or agricultural commodities' price increases.

 

China usually purchases oilseeds and grains from North and South America for livestock feed. It is rebuilding is massive swine herd decimated after an African swine fever outbreak spread in the country.

 

- Reuters