Brazil's May soybean shipments to fall short of record April levels: Williams

New Delhi — Brazil's May soybean shipments are unlikely to record export levels seen in April, with vessels carrying about 14.3 million mt of beans either already having sailed or lined up to leave the ports during this month, data from shipping agency Williams showed.

Brazil exported 16.5 million mt of soybeans in April, a monthly record, and the pace of exports in May is continuing to accelerate, according to data from the country's foreign trade ministry.

Despite a growing number of positive novel coronavirus tests in Brazil, port operations have remained normal so far, according to sources.

Handling of dry bulk cargoes at the country's public and private ports in the first quarter of 2020 rose 2.9% year over year, with the biggest increase seen at the Paranagua port, according to data from Brazil's water transport agency, Agência Nacional de Transportes Aquaviários.

CHINESE DEMAND IN FOCUS

About 5.2 million mt of soybeans are scheduled to sail between Thursday and May 31, according to shipping data from Williams. Of the 14.3 million mt of beans expected to ship out in May, about 8.9 million mt is destined for China, according to the data.

Previously, Beijing-based Cofeed said soybean imports into China are expected to reach "overwhelming levels" in May, with about 151 cargoes estimated for arrivals during the month.

Besides the peak export season, the healthy pace of Brazilian soybean shipments is also supported by the depreciation of the Real, which has fallen sharply against the US dollar since January, making Brazilian soybeans more competitive with other origins.

Grain freight rates for the Brazil-China route are currently 27% lower than in January, with a 60,000 mt cargo costing $19.50/mt as of Wednesday, according to S&P Global Platts data.

Brazilian farmers' sales of soybeans for the 2019-20 marketing year (February 2020–January 2021) have already reached 85% of the 120 million mt of production estimate for the season on the back of the currency weakness and relatively strong demand from China.

According to Aprosoja Brazil's April crop bulletin, Brazil is expected to export 77 million mt of the total 2019-20 output, of which 66 million mt will be shipped to China.

Crushing margins in China for Brazilian soybeans still remain healthy and above the margins for beans imported from the US and Argentina, according to Cofeed.