April 23, 2020

 

Brazil's April soybean exports rise 28%

 

 

In the first three weeks of April, Brazil exported 9.16 million tonnes of soybeans, up 28% on-month, according to the Brazilian foreign trade department.

 

The average daily soybeans shipment stood at 763,763 tonnes in April so far, the report said Monday.

 

Shipments from Brazil rose 14% on-year to 18 million tonnes in the first quarter of 2020, with almost 74% of them going to China, the trade department said. Analysts said Brazil could export over 12 million tonnes of soybeans in April.

 

Backed by a good soy harvest pace and robust demand from Chinese crushers, Brazilian soybean exports could continue to rise in coming weeks, a market source said.

 

Soybean harvest pace in the South American nation has reached 92% of the projected area of 36.4 million hectares in the 2019-20 crop year (September- August), as of April 16, up 1% on five-year average, AgRural said Monday.

 

Another factor favouring Brazilian soy farmers is the timing of exports. The period of February-May is seen as a peak season for the country's soybean harvest and sales, while the new US soybean crop planting only starts late April.

 

Despite the US-China phase one trade deal, signed January 15, Chinese crushers still prefer the more price-competitive Brazilian beans over the US-origin, market sources said. Additionally, profitable crush margins have encouraged world's largest soybeans importer to continue covering their old and new crop demand from Brazil.

 

For May and June, China's average soy import coverage is almost complete, market sources said. In fact, Chinese buyers are now mostly focused on booking July and August shipments of cheaper Brazilian beans.

 

Brazilian soybeans have gained price advantage over their main competitor, US-origin beans, in recent weeks because of a record high average output forecast of 123 million tonnes-125 million tonnes by sector analysts.

 

A falling Brazilian real, which has lost almost a third of its value since January, has also boosted Brazilian soy's price competitiveness.

 

Market participants said Brazilian soybeans have been currently selling at a discount of 10-20 cents/bushel to US beans at Chinese ports. However, with major American meat processing and packaging plants shutting down due to the COVID-19 pandemic, US-origin soy is slated to sell cheaper in the coming days.

 

Brazil is expected to export 72 million tonnes in 2019-20 local marketing year (February 2020–January 2021), up 3% on-year, national crop agency Conab said in its December report.

 

Market participants believe the country's soy exports in 2019-20 could rise further due to pandemic-fuelled Chinese buying spree and the free-falling Brazilian real.

 

The USDA has already increased its Brazilian soybean exports forecast for 2019-20 marketing year (October 2019–September 2020) to 78.5 million tonnes, up 5% on-year, in its latest World Agricultural Supply and Demand Estimates report.