Brazil to ship out at least 8.8 million mt soybeans in May, with China buying over half: Williams

New Delhi — Brazil will be shipping out at least 8.8 million of soybeans in May, with about 53% of the cargoes heading to China following a record export month in April, recent lineup data from shipping agency Williams showed.

Throughout May, about 4.6 million mt of soybeans can already be seen in the lineups for sailing to China, according to the data. As of April 28, 8.6 million mt of soybeans has been already sailed out to the Asian nation.

Brazil's export pace has reached a new record level in April, with global soybean shipments totaling 13.2 million mt as of April 24, up 13.4% from the same period last month, data from Brazil's MDIC showed.

Soybean harvesting is in full swing in Brazil, with factors such as Chinese crushers looking to cover their demand amid supply disruption due to coronavirus pandemic, and a falling Brazilian real also seen supporting the accelerated pace of soybean shipments.

Grain freight rates from Brazil to China are also sharply lower, down 33% from February levels, with a 60,000 mt cargo size costing $19.75/mt as of Tuesday, according to S&P Global Platts data.

Sources said port operations in Brazil have continued normally so far, despite strict measures employed by authorities to combat coronavirus. Brazil extended quarantine until May 10 in Sao Paulo state, which hosts the main agriculture port of the country, Santos.

Over April 28-30, there are still 726,280 mt of beans lined up at Brazilian ports, with 10 of the 11 cargoes heading to China, according to Williams data.

Brazil's soybean shipments generally peak between March and May.

CHINA CONTINUES TO BUY AT BRISK PACE

In China, soybean import prices fell to an all-time low, with Platts assessed SOYBEX CFR China hitting $352.85/mt on Tuesday. This is the lowest price since Platts started assessing this market in July 2018.

China has been seeing decent crushing margins in recent weeks, with spot crushing margins for soybeans from Brazil for May arrival seen at a healthy rate above Argentinian and US bean arrivals, the latest data from Beijing-based Cofeed showed.

In May, soybean arrivals into China are expected to be 9.9 million mt, up 40.5% from the same month last year, Cofeed said.

About 43 vessels are expected to reach East China in May with about 2.8 million mt of beans, the largest volume arrivals of all Chinese ports, according to Cofeed.

Some soybean crushers told Platts that China's soybean imports could reach 91 million-92 million mt in the 2019-20 marketing season (October-September), while two large crushers said they were more optimistic that imports would hit 94 million-95 million mt.