CHICAGO (Reuters) - November through January is typically the least active period for Brazilian soybean exports, but that quiet time has lately been getting louder - and possibly at the expense of the United States.
Record-large crops were harvested earlier this year in Brazil, the No. 1 and No. 2 soybean and corn supplier, respectively, though fewer total shipments are scheduled within the next month or so than was the case two years ago.
Soybeans are not the culprit. According to shipping agency Williams, more of the oilseed is on deck to leave Brazil’s ports than ever before during mid-December.
But while corn shipments should be near peak, the current port lineup is only half as heavy as the 2015 record for the month, reflective of bloated world supplies.
Brazil’s exports exploded in the final three months of 2015 as farmers had reaped bumper crops and the prices were especially favorable for international buyers. Corn plus soybean shipments in that period totaled 21.3 million tonnes - most of which was corn – dwarfing 2013’s high of 13.1 million.
Corn and soy output in 2017 was 30 million tonnes larger than in 2015, but lower profit potential has discouraged active selling by Brazilian farmers as both domestic and global stockpiles have swollen. Still, combined shipments are down only 9 percent from two years ago in the months of October and November.
But Brazil’s soy export program is as healthy as ever for the time of year. Mid-month port lineups show 2.4 million tonnes of the oilseed on the docket, some 1 million tonnes more than the same date in 2015. (reut.rs/2Bf8SgS)
Meanwhile, the United States appears to be falling short of its lofty bean export ideas. As of Dec. 14, port inspections for the oilseed were down 13 percent from the year-ago record, although the government is expecting a 2 percent increase in annual shipments.
Brazil has 4.5 million tonnes of corn in the mid-December lineup, much smaller than the 9.4 million at the same point in 2015. However, the country amassed record-shattering shipments in July through September, earlier than the usual time frame. (reut.rs/2B3hWRu)
Brazil’s export program has been running more smoothly than in years past partly owing to the technological and logistical improvements at the major ports, along with the increased use of ports in Northern Brazil. Traffic outside the major port of Paranagua in early December was nearly 90 percent lighter than two years earlier. (reut.rs/2yYcXQj)
Use of the smaller ports has especially supported the soybean volumes. Ten of Brazil’s major 11 ports had soybeans on their mid-December schedule compared with six at the same point in 2016 and just four in 2015. The early 2016 drought clipped the country’s output for soybeans and particularly corn, so its exports in the second half of that year and early 2017 were greatly reduced.
The recent exports are impressive considering how much farmer sales had dropped from the prior year. But marketing is even slower for the 2017-18 crops, which will start being harvested in January, leaving potential implications for next year’s exports.
Brazilian farmers had sold 26.7 percent of the 2017-18 soybean crop as of earlier this month, according to consultancy Safras & Mercado. That compares with 28 percent one year earlier and a historical average of 33 percent.
But sales lag further in the No. 1 soybean state of Mato Grosso. According to a mid-month report from state agency IMEA, farmers in the region had marketed 39 percent of the current soy crop. This is down 9 percentage points from a year ago and down 17 points from 2015. (reut.rs/2BHZbHb)
Mato Grosso is the top corn grower as well, and those marketings are even slower. Just 16 percent of this year’s corn crop was sold as of mid-December versus 31 percent last year and 74 percent in 2015, but the latter was highly anomalous.
Soybean prices in Brazil have slowly improved in recent months with a more favorable exchange rate. Last week, the Brazilian real hit a six-month low, and a weaker currency generally encourages farmer selling.
But pressure in the soybean market has reappeared in the last two weeks as CBOT futures have plunged more than 5 percent on a better weather outlook for dry areas of Argentina, world trade leader in the soy products.
Editing by Matthew Lewis