New Delhi — Brazil exported 9.16 million mt of soybeans in the first three weeks of April, up 28% month on month, according to a report by the Brazilian foreign trade department.
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The average daily soybeans shipment stood at 763,763 mt in April so far, the report said Monday.
Shipments from Brazil rose 14% year on year to 18 million mt in the first quarter of 2020, with almost 74% of them going to China, the trade department said. Analysts said Brazil could export over 12 million mt of soybeans in April.
Backed by a good soy harvest pace and robust demand from Chinese crushers, Brazilian soybean exports could continue to rise in coming weeks, a market source said.
Soybean harvest pace in the South American nation has reached 92% of the projected area of 36.4 million ha in the 2019-20 crop year (September- August), as of April 16, up 1 percentage point on five-year average, AgRural said Monday.
Another factor favoring Brazilian soy farmers is the timing of exports. The period of February-May is seen as a peak season for the country's soybean harvest and sales, while the new US soybean crop planting only starts late April.
Despite the US-China phase one trade deal, signed January 15, Chinese crushers still prefer the more price-competitive Brazilian beans over the US-origin, market sources said. Additionally, profitable crush margins have encouraged world's largest soybeans importer to continue covering their old and new crop demand from Brazil.
For May and June, China's average soy import coverage is almost complete, market sources said. In fact, Chinese buyers are now mostly focused on booking July and August shipments of cheaper Brazilian beans.
Brazilian soybeans have gained price advantage over their main competitor, US-origin beans, in recent weeks because of a record high average output forecast of 123 million mt-125 million mt by sector analysts.
A falling Brazilian real, which has lost almost a third of its value since January, has also boosted Brazilian soy's price competitiveness.
Market participants said Brazilian soybeans have been currently selling at a discount of 10-20 cents/bushel to US beans at Chinese ports. However, with major American meat processing and packaging plants shutting down due to the coronavirus pandemic-led lockdown, US-origin soy is slated to sell cheaper in the coming days.
Brazil is expected to export 72 million mt in 2019-20 local marketing year (February 2020–January 2021), up 3% year on year, national crop agency Conab said in its December report.
Market participants believe the country's soy exports in 2019-20 could rise further due to pandemic-fueled Chinese buying spree and the free-falling Brazilian real.
The US Department of Agriculture has already increased its Brazilian soybean exports forecast for 2019-20 marketing year (October 2019–September 2020) to 78.5 million mt, up 5% year on year, in its latest World Agricultural Supply and Demand Estimates report.