December 30, 2023


US soybean exports set for Q1 boost as Brazil faces planting delays


United States soybean exports are anticipated to receive a significant boost in the first quarter of 2024 due to delays in Brazil's planting for the marketing year 2023/24, as industry experts suggest that this delay may support oilseed futures prices during this period, S&P Global reported.


Jack Larimer, senior research analyst at S&P Global Commodity Insights, highlighted the expectation of robust momentum in US soybean exports through Q1 2024 until the delayed Brazilian harvest, likely extending into March. The slowed pace of soybean planting in Brazil is seen as a contributing factor, creating an opportunity for higher-than-normal export sales from the US.


Typically, US soybean exports peak from October to December, remaining strong until mid-February. But with the delayed Brazilian soybean harvest gaining momentum in late February, the global market dynamics usually shift towards cheaper Brazilian oilseed shipments.


This year, Brazil, the world's leading soybean producer and exporter, has faced challenges due to El Niño-induced weather extremes since October. These challenges, including drought and excessive rainfall, have led to significant delays in soybean planting, particularly in Mato Grosso, the country's top soybean-producing region.


The delayed planting in Brazil is expected to create a favourable scenario for US soybean farmers, as they step in to fill supply gaps caused by weather-related delays. The impact of El Niño has affected not only Mato Grosso but also neighbouring states and southern Brazil, disrupting planting activities and raising concerns about crop health and delayed harvest.


As both the US and Brazil aim to secure a share in China's soybean market, 2024 is anticipated to be a productive year for both suppliers. China is projected to import a record 101 million metric tonnes of soybeans in the marketing year 2023/24, with Brazil historically dominating around 65% of these imports and the US accounting for approximately 25%.


While the imminent harvest delays in Brazil are expected to boost US soybean sales in Q1 2024, analysts predict a decline in US exports once Brazilian and other South American soybeans flood the market in March-April. S&P Global's export forecast for US soybeans in marketing year 2023/24 stands at over 1.7 billion bushels, representing an 11.6% decrease from the previous year.


Chinese crushers and traders also anticipate a shift in demand toward Brazilian soybeans as the year progresses. Brazil's delayed soybean harvest in 2023-24 is expected to reach around 158 million metric tons, making it highly competitive against US-origin soybeans.


Despite the bullish outlook for Brazilian soybean exports, caution is expressed concerning global soybean trade in 2024. Analysts anticipate stagnation in global soybean demand, influenced by a decline in China's animal numbers, particularly hogs, and its slowing economy.


-      S&P Global

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