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Сельское хозяйство

COMMODITIES 2021: Brazilian soybean sales expected to remain elevated

Сельское хозяйство

Platts Agriculture Alert (Новости Platts о сельском хозяйстве)

COMMODITIES 2021: Brazilian soybean sales expected to remain elevated

Самое важное

Brazil likely to witness record supply and demand scenario

Real expected to slide in 2021 on fiscal concerns

China seen preferring Brazilian beans over the US-origin

Ending stocks likely to remain low on high domestic crush

New Delhi — After a year of soaring sales and low ending stocks, the Brazilian soybean farmers are likely to witness another year of high supply and demand scenario in 2021, on the back of a weak currency forecast.

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According to the average analysts' estimates, despite the delayed planting and La Nina concerns, Brazil is forecast to produce 129 million–133 million mt of soybeans in 2020-21 marketing year (February 2021–January 2022), an all-time high volume.

Brazilian soybean farmers received unprecedented profits for their 2019-20 crop due to a weak real and robust Chinese demand, Companhia Nacional de Abastecimento, or Conab, said in its latest report in December. Farmers are therefore bullish on oilseed crop planting for 2020-21, with record acreage transferred from other crops, the report said.

The soybean acreage in Brazil is forecast to expand 3.3% year on year to 38.17 million hectares in 2020-21 and exports are projected up 1.7% on the year at 85 million mt, Conab said.

Notwithstanding a record soybeans output, the prices of the Brazilian beans are projected to soar on strong domestic and export demand, coupled with limited stocks during the second half of 2021, analysts said.

Brazilian farmers have forward sold nearly 65% of the 2020-21 projected crop, as of late November, up 35 percentage points on the year, according to the states' average estimates.

Similar to 2020, Brazilian soybean farmers are likely to sell their produce in the range of $12-$14/bushel in H2 2021 and gain record margins, a Chicago-based agricultural consultant said.


As the unrelenting coronavirus pandemic spread across the globe, leading to an economic slowdown, the Brazilian real depreciated almost 30% year on year during the first half of 2020. Consequently, the Brazilian soybeans were selling at an average discount of 30-40 cents/bu against the US-origin in H1 2020.

This induced a massive buying frenzy for the South American beans, especially by China. Monthly record shipments of Brazilian oilseed were sent to the Asian nation between February and July.

Brazilian soybeans are projected to remain price competitive in the new harvest season as well, beginning February 2021, as the economists predict another year of weak real due to fiscal concerns, analysts said.


In the last few years, on average, Brazil has shipped out 75% of its soybean shipments to China, Secretariat of Foreign Trade, or SECEX, report said.

Despite the US-China Phase 1 trade deal, Brazil remained the Asian nation's prime supplier of soybeans in 2020.

China purchased 31.8 million mt of US beans between Jan. 1 and Dec. 17, compared with 10.5 million mt in the same period last year, according to the USDA's export sales report. Simultaneously, the world's second-largest economy imported over 60 million mt of Brazilian beans between January and November, up 8% on the year, SECEX said Dec. 5.

This trend is likely to continue in 2021 on the back of expectations that China's swine herd is set to fully recover from the African swine fever, or ASF, epidemic early next year.

The US Department of Agriculture and Platts Analytics, both forecast China's soybean demand in 2020-21 at an all-time high volume of 100 million mt, due to the country's sharper than expected hog and sow herd recovery from ASF.

Additionally, China is keen to enhance its grains and oilseed reserves in 2021 to cover for supply-side uncertainties, such as trade spats and pandemics, analysts said.

Chinese crushers have booked new crop Brazilian beans in large volumes for 2021 deliveries, a China-based crusher said.

Irrespective of the trade deal, Chinese crushers generally prefer Brazilian beans over the US-origin, a Shanghai-based agricultural consultant said. There is less complexity in Beijing-Brasilia trade relations, he said.


Brazilian crushers are expected to cover for supply-side risks and ramp up soybeans purchases in H1 2021 once the new harvest hits the market in February, analysts said.

The crushers faced extreme supply tightness of raw beans in H2 2020, leading to higher input prices and low capacity utilization.

According to average analysts' estimates, despite a record output forecast, the ending stocks for Brazilian beans in 2020-21 is expected to remain low at about 15 million mt, down 10% year on year, on low carryover and high crush demand.

Brazilian crushers faced high demand for the soybean products in 2019-20, with crush estimates at 48.9 million mt, up 10% year on year, Conab report said.

Similarly, the domestic soybean demand in 2020-21 is expected to remain heated at 49 million mt, due to a thriving meat industry and the higher biodiesel mixture requirement, which will go from B12 to B13 mandate, starting March 1, Conab said.

Soybean meal is extensively used in animal feed, while soybean oil comprises over 80% of the vegetable oil used for biodiesel production in Brazil.