Brazil’s soybean harvest may be off to a
slow start, but there’s no hint of easing for the country’s
exports, a sign that the U.S. will continue to face stiff
competition even after striking a trade deal with China.
The line-up for shipping from the South American nation is
underscoring robust demand. In fact, desire for Brazilian
supplies is so hot that “sometimes vessels are nominated even
before the soy had been collected from the fields,” Daniele
Siqueira, an analyst at AgRural, said in a telephone interview.
“That’s a sign demand for Brazil’s soybeans remains
strong,” she said.
That comes as crop gathering has been hampered by a delayed
start after later-than-usual plantings. Soy harvesting in Brazil
was 4% complete as of Jan, 23, below the level of 13% at the
same time last year, when fieldwork started earlier than usual.
It’s also below the five-year average of 5%.
But that’s not holding back exporters, who can continue
shipping from inventories until the harvest accelerates.
Major Brazilian ports were scheduled to ship 3.5 million
metric tons of soybeans as of Jan. 24, rising from 2.6 million
tons a week earlier, according to figures from the shipping
agency Williams.
Adding to that figure the vessels that have sailed so far
this month, the soybean line-up totaled 4.2 million tons as of
Friday. That’s below 6.15 million tons a year ago, but in line
with 4.3 million tons in 2018, when Brazil’s soy exports reached
a record.
Forward sales of the new crop is another indication that
U.S. exporters will have limited room to boost exports to China
in the coming months. Brazilian farmers sold 43% of the 2019-20
crop as of Jan. 10, or about 53 million tons of soybeans,
encouraged by the exchange rate and high premiums, according to
Luiz Fernando Roque, an analyst at Safras & Mercado consulting
firm. The great majority of that volume is destined for exports,
with China as the main destination that accounts for roughly 80%
of the nation’s shipments.
“High forward farmer sales is an indication of good
exports,” he said.
By Tatiana Freitas
(Bloomberg)