Brazilian FOB soybean outright prices have fallen below the $550/mt mark to a nearly 14-month low amid a record crop and faltering spot demand on both the export and domestic front, with subsequent pressure over cash premiums.

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The SOYBEX FOB Santos price for April dates was assessed at $548.33/mt March 13, the lowest for front-month loading cargoes since Jan. 24, 2022, showed data from S&P Global Commodity Insights. The basis for the same period was at plus 1 cent/bushel to the Chicago Board of Trade May (K) contract, a level not seen since mid-June 2021.

Participants attributed the bearish situation mainly to the historically large Brazilian soybean crop. Despite some rain-led harvest delays in the past weeks, the country remains on track to produce a record-breaking 153 million mt of the oilseed, up 18% on the year, according to the US Department of Agriculture's latest estimate.

The pace of farmer sales has improved recently in response to the strength of the US dollar against the Brazilian real and producers' need to make room in their silos for the coming months, when the winter corn crop will be harvested, sources told S&P Global.

"Currency exchange pushing and a sea of soybeans coming. It will be difficult to hold nearby [levels]," a Brazil-based trader said.

Faltering demand

Spot demand for Brazilian soybean supplies has been relatively low in export and domestic markets, further pressuring prompt premiums, sources said.

Chinese importers have already secured all their soybean needs for March, three quarters for April and slightly above 50% for May, according to estimates from market sources. With nearby demand commitments mostly covered, there is no real rush for fresh Brazilian cargoes, sources said.

Falling domestic soybean meal prices and negative crush margins have also discouraged additional purchases by Chinese buyers. On March 13, the soybean gross crush margin in China was assessed at minus $9.90/mt, according to S&P Global data.

China is the world's largest importer of soybeans and has Brazil as a key supplier of the commodity.

Demand from crushers in Brazil has been low as well as local industry has already fulfilled its needs until mid-May, according to a trader.