South American meal premiums strengthen amid harvest delays, short covering

Port premiums for South American soybean meal have been strengthening in recent weeks, contrasting with an expected period of seasonal pressure, as harvest obstacles in Argentina and a round of short covering in Brazil push premiums higher.

Platts, part of S&P Global Energy, on April 7 assessed the basis for Argentine soybean meal FOB Up River for May delivery at $3/short ton above the benchmark contracts on the Chicago Board of Trade. It was the highest level for a spot shipment since March 19 and compared to a $3/st premium by this time last year.

In the case of Brazil, the FOB Paranaguá basis for May was assessed at a premium of $7/st to CBOT futures, the highest for a spot shipment since Feb. 12 and compared to a $5/st premium a year ago, according to Platts data.

Regarding outright prices, Platts assessed the FOB Up River value at $347/metric ton on April 7, up 8% year over year, while FOB Paranaguá rose by 8.7% to $351.41/mt.

According to participants, disruptions faced by Argentina's crop have, in part, contributed to this support — after all, the country is the world's largest exporter of the commodity, with shipments estimated at 29.50 million mt for the 2025-26 season (April-March) by S&P Global Energy CERA.

"Quite some books done, big April line-ups, harvest stopped due to rains, physical soybeans availability scarce [...] Until this accommodates, support is there," an Argentine-based broker commented on the firmness of FOB Up River.

Indeed, sources reported a slower-than-expected soybean harvest in Argentina, although production potential remains favorable.

"Crop conditions have reached their highest level in the past five years, thanks to rainfall during March," the CERA analysts said in the Weekly Soybean Complex report issued April 2, adding that "forecasts predict two more weeks of rain, which should help maintain favorable conditions for late-planted crops."

CERA analysts project an Argentine crop of 48.50 million mt, with crushing at 43 million mt.

Surge in Brazil

Regarding the FOB Paranaguá paper market, which is the benchmark for Brazilian soybean meal prices, the firmness of recent days is driven by strong short-covering, with several parcels traded for the curve from May to July.

According to participants, disruptions caused by the conflict in the Middle East, including rising diesel prices and their subsequent impact on road freight, have affected the availability of soybean meal at Brazilian ports, following a cycle already marked by tighter carryover stocks.

As a result, traders have had to buy back their short positions ahead of the May vessel nomination period, which begins in mid-April, market participants said.

As the world's second-largest exporter of soybean meal, Brazil is expected to ship 25.50 million mt of the product this year, a record, according to CERA estimates.

Brazil is currently in the final stretch of its 2025-26 soybean harvest, with 79% completed as of April 1, below last year's 85% but close to the five-year average of 81%, according to CERA, which forecasts a historic production of 182 million mt of soybeans, with crush at 62.50 million mt.

Platts is part of S&P Global Energy.