Brazil's meal prices exceed Argentina's for first time since November

Brazilian soybean meal export spot prices have surpassed those in Argentina for the first time since November 2024, driven by concerns over the pace of the country's harvest, which raised questions about short-term supply.

Platts, part of S&P Global Commodity Insights, assessed the March-loading price of soybean meal FOB Paranaguá at $333.34/mt on Feb. 6, in contrast to $332.23/mt for shipments FOB Up River.

This marks the first instance since Nov. 22, 2024, when Brazilian prices have exceeded those in Argentina. On that date, regarding January 2025 loading, Platts assessed the soybean meal price FOB Paranaguá at $330.14/mt, compared to $329.04/mt in the FOB Up River market.

Sources indicated that part of the support for Brazilian prices arose from delays in soybean harvesting caused by rainfall in specific regions, particularly in the primary producing state of Mato Grosso. Although current weather conditions suggested a potential acceleration in fieldwork, recent developments have raised concerns regarding the supply of raw materials for immediate commitments of soybean meal and oil.

"People seem desperate to me. They are covering the spot due to the ship nominations," a trader said, alluding to the recent firmness noted in the port differentials for soybean meal FOB Paranaguá.

From Jan. 24 to Feb. 6, the spot basis for soybean meal FOB Paranaguá increased by $9/st to a discount of $4/st relative to futures on the Chicago Board of Trade, according to Platts.

The latest data from Commodity Insights revealed that the soybean harvest for the 2024-25 crop year in Brazil is currently 6% complete, down from 13% a year ago and below the five-year average of 7%.

"We anticipate lower yields in central Brazil due to excessive precipitation and in southern Brazil due to dry conditions; however, the decline should not exceed 3 million mt," Commodity Insights analysts cautioned in the Weekly Soybean Complex report issued Jan. 31.

Concerns regarding the harvest have prompted producers to slow the pace of soybean sales for this year's crop in recent weeks, providing additional support to export premiums. Certain activity in the domestic market for contract pricing has also played a role.

Market participants expected that the Brazilian soybean meal market would face pressure in the coming weeks as the harvest for this year's crop, projected at a record 175 million mt by Commodity Insights, intensifies.

"Retenciones"

While the Brazilian soybean meal market has shown firmness in recent days, Argentina's market has begun to feel the impact of cuts in export taxes, known as "retenciones," sources said.

According to a decree from Casa Rosada, tariffs on Argentine shipments of soybean meal have been set at 24.5% since Jan. 27, down from the previous rate of 31%. The reduced taxes translate into higher prices for producers, subsequently encouraging farmer selling.

Participants estimate that approximately 700,000 mt of old-crop soybeans may have been traded in Argentina over the past week. Official data is expected to be released next week.

Argentina is typically the world's largest exporter of soybean meal, followed by Brazil.