Brazilian soybean meal widens gap to Argentina

Brazilian soybean meal export prices have significantly diverged from Argentina's, with the port spread premium against its competing origin at the highest level in seven months.

On Sept. 11, Platts assessed the FOB Paranaguá price for October at $383.60 per metric ton, $9.92/t higher than the FOB Up River value for the same loading period.

The premium for Brazilian soybean meal stood at $32/st over Chicago Board of Trade futures, compared with $23/st for Argentina. This marked the largest port spread favoring Brazil since Feb. 15, according to Platts, part of S&P Global Commodity Insights.

Increasing buying activity among Brazilian feeders seeking to secure domestic contracts has contributed to the bullish sentiment in the Brazilian soybean meal premiums market, sources said. Strong internal demand from poultry and pork producers and dropping inventories have also been supportive.

Additionally, decreasing water levels in the Paraná River might impact Argentina's export capabilities, although no major impacts have been reported for now.

Historically the world's largest soybean meal exporter, Argentina relies heavily on Up River ports for its shipments, with Rosario as its primary hub. The country's competitiveness is closely tied to conditions in the Paraná River, as lower water levels may compel vessels to load in alternative locations, including Brazilian ports.

According to data from Argentina's government, the Paraná River water level at Rosario has been hovering at its lowest point for 2024.

Brazil is projected to export 21.20 MMt of soybean meal in the marketing year 2023-24 (January-December), down 5.7% YOY, according to Commodity Insights estimates.

In contrast, Argentina's soybean meal exports for MY 2023-24 (April-March) are expected to reach 28.10 MMt, a recovery from 19.17 MMt in MY 2022-23, which was severely impacted by a historic drought.