Argentina and Brazil soybean exports to rise in 2019/20 season

Exports of soybean from Argentina and Brazil in the 2019/20 trading year (October-September) are expected to increase, while US sales will fall due to the country’s current trade dispute with China and the low US production forecast, according to the US Department of Agriculture (USDA).

According to the US agency, Brazilian soybean exports in the 2019/20 harvest are expected to reach 77.8m tons, an increase of 13% over the same period of the previous year. This is due to larger stocks of soybeans (volume almost 100% higher), and the trade dispute between China and the US.

Soybean exports from Argentina will reach 8m tons in 2019/20 season, almost the same volume as in the 2018/19 harvest and 116% higher than the 2017/18 exports.

US soybean exports in 2019/20 (September to August) were projected at 5m tons, up 11% from the previous year but down 12% from 2017/18, according to the US agency.

The combination of an area of ​​low soybean harvest and production decline in 2019 is expected to reach US soybean exports in 2019-20.

Due to the unfavorable weather in 2019, the US soybean area fell more than 10% from the previous year to 79.5m acres, while yield fell 6% to 48.5 bushels per acre. As a result, US soybean production in 2019/20 fell 15% to 104.64m tons.

US-China trade tension

Last July, China applied an additional import tariff of 25% on US soybeans in response to US tariffs on Chinese products.

As a result, US soybean shipments to China fell 81% to 5.4m tons between July 2018 and March 2019, according to the United States. Chinese buyers exclusively sought Brazil, the world’s largest soybean exporter.

Since the beginning of the trade dispute, the share of US soybean in the Chinese market fell 8% (5.4m tons) from July 2018 to March 2019 and 34% (28.4m tons) last year.

In the same period, Brazil’s market share jumped to 85% (47.9m tons) from 55% (36m tons) in the previous year, according to data from China’s General Administration of Customs.

The following INDEC graph shows Argentina’s soybean export trends against FOB earned:

Source: SP Global

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