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Brazil March soy exports seen down on U.S. competition, farmer hoardingBrazil March soy exports seen down on U.S. competition, farmer hoarding
José Roberto Gomes, Roberto Samora
3 Min Read
SAO PAULO (Reuters) - Brazil’s soybean exports are expected to fall in March due to U.S. competition, farmer hoarding of beans due to low prices and forecasts for lower output in the world’s top exporter of the oilseeds, according to market participants and shipping data.
FILE PHOTO: A worker inspects soybeans during the soy harvest near the town of Campos Lindos, Brazil February 18, 2018. REUTERS/Ueslei Marcelino/File photo
The outlook marks a sharp contrast from March 2018, when Brazil harvested a record crop and as buyers in China turned to the country’s abundant supplies on prospects that Beijing’s trade war with Washington would escalate.
Brazil exported some 9 million tonnes of soybeans in March of last year and a record of 84 million tonnes in 2018.
“We have 7.3 million tonnes of soybeans in the ship line-up,” said Frederico Humberg, chief executive of grain trader AgriBrasil. “We are already somewhat affected by the purchases of U.S. soybeans by China.”
Recently China pledged to buy another 10 million tonnes of U.S. soybeans, indicating more competition for Brazil even as the Trump administration’s talks with China to end the trade war have not produced a consensus.
Sergio Mendes, head of grain exporters association Anec, said the outlook for Brazilian exports “is concerning” because now the country faces U.S. competition in the first half of the year, which is unprecedented.
U.S. exports are generally strong in the last quarter of the year after the local harvest. But in 2018 smaller volumes were exported because of the impasse with China.
Brazil’s soybean output will likely fall by about 5 percent to 113 million tonnes in 2019 with exports seen at just under 79 million tonnes, according to broker and consultancy INTL FCStone.
“While everyone (in the United States) waits the for the war to end to sell soybeans, the problem is (knowing) what kind of agreement will be made,” said Chicago-based analyst Tarso Veloso at Arc Mercosul, speculating on whether any deal would cover old-crop U.S. soybeans.
Brazilian exports have also been hit by farmer hoarding due to lower port premiums, weak Chicago prices and the appreciation of the Brazilian currency. A professional from a large farm enterprise in Mato Grosso state said this has affected producers’ appetite to sell.
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“We traded some 45 percent of the crop and stored the rest,” the source said requesting anonymity to speak freely.
“At these prices farmers are not selling anything,” said Evandro Lermen, president of farm cooperative Coacen. He said soy harvest was brought forward by 15 days and farms are under no pressure to pay bills yet.