July 5, 2021
US soybean exports at second-highest value during Q1, 2021
US soybean exports had reached the second-highest value ever at US$7.7 billion in the first quarter of 2021, nearly double from the decade low levels from the same period in 2020.
This growth was driven by record first quarter export volumes coupled with high prices, which have been climbing steadily during the past year. Export volumes are up substantially due to the rebound of trade with China owing to the removal of retaliatory tariffs, the rebuilding of the swine herd from African swine fever (ASF) and a delayed South American harvest extending the US selling window.
Export values were further supported by US soybean prices, increasing to seven-year highs on strong Chinese purchases, high corn prices and tight supplies in the United States and South America.
The major growth driver in the second half of 2020 and the first quarter of 2021 for US soybeans has been the reemergence of China imports. Expanding swine inventory in China increased feed demand.
Additionally, implementing the Phase One agreement between the US and China in February 2020 reduced some trade barriers and allowed US farmers greater access to the growing Chinese market.
However, the US did not see exports to China spike until the second half of 2020, after Chinese purchases exhausted Brazil's soybean supply. With virtually no competition from Brazil and China importing soybeans at a record pace, the US exported record soybean volumes and values in the second half of 2020.
In the first quarter of 2021, both the US and Brazil, whose exports make up about 85% of global soybean movement, have seen an increase of more than 50% in the average soybean export price since the first quarter of 2020.
Part of the steady price growth has been China's faster-than-expected recovery from ASF and subsequent growth in soybean imports.
China bought the majority of the 2019/20 Brazilian soybean crop, forcing ending stocks (January 31, 2021 basis) below two million tonnes for the first time in nearly 20 years.
Tight supplies have driven global prices upward and put immense pressure on the upcoming 2020/21 US harvest. US corn price spikes since August 2020 have also fueled growth in soybean prices.