Brazilian soybean prices plunge as exportable stocks grow

With about 33.47 million tonnes exported from January to April, Brazil just had its best four-month period in the history of oilseed shipments. Almost 15 million tonnes were shipped in April alone.

The year-to-date result exceeds by 1 million tonnes the export volume seen in the same period last year and by 2 million the volume exported between January and April 2021, when Brazil shipped 31.5 million tonnes, helping achieve a year-round record of 86.1 million tonnes.

With an output of roughly 150 million tonnes in 2023, Brazil is expected to export between 90 and 95 million tonnes of soybeans. However, the international exchange rate is a challenge, with Chicago’s quotes falling to US$ 12/bushel and the exchange rate at R$ 5 per dollar.

This explosive combination keeps a bag of the commodity at R$ 125 in the main supply markets in Brazil. Sales are still stalled, waiting for a reaction in quotations or the exchange rate, whatever comes first, though none of these options seems likely to unfold.

The price condition reflects the record-breaking harvest in Brazil and the prospects of a good output in the United States, the second-largest soybean producer in the world, currently planting its 2023/24 crop.

Not even the plummeting production in Argentina, the world’s third-largest producer, could sustain prices a little higher. Brazil’s neighbor to the south has an estimated output of 25 million tonnes, at almost half of its capacity.

See below a chart displaying the volume of Brazil’s soybean exports between Jan 2020 and Mar 2023, according to DataLiner.

Brazilian soy exports | Jan 2020 – Mar 2023 | WTMT

Source: DataLiner (click here to request a demo)

Soymeal and soy oil 

In the wake of record production and crop failure in Argentina, the world’s largest exporter of soy meal, Brazil is closing the gap and upping oilseed crushing and sales of processed products.

Between January and April, 6.3 million tonnes were exported, above the 6.1 million shipped in the same period in 2022. Last year, the country sold 20.3 million tonnes abroad.

Brazilian meal exports experienced a hike between 2017 and 2018, going from 14 million to 16 million tonnes, coincidentally at another moment of major climatic disruptions in Argentina.

This pattern should be repeated in the 2022/2023 cycle, given Brazil’s potential to crush and export up to 25 million tonnes of soybean meal.

Soybean oil is also experiencing exponential growth. From January to April, 900,000 tonnes were shipped against 693,000 tonnes in the same period last year. That is more than double the 419 thousand tonnes in the first four months of 2021.

In 2022, the country exported 2.59 million. In 2021, exports totaled 1.65 million tonnes. The expectation in 2023 is for foreign sales to reach 3 million tonnes.

Check Brazil’s soybean oil (hs 1507) exports between Jan 2020 and Mar 2023, according to the DataLiner data service.

Soybean oil exports | Jan 2020 – Mar 2023 | WTMT

Source: DataLiner (click here to request a demo)

Oil exports from Brazil are driven mainly by purchases in the European Union. Due to the conflict in Eastern Europe between Russia and Ukraine, Europe is working to reduce dependence on Russian gas, where soy oil enters as an option as fuel and energy.

Source: Canal Rural

To read the original article, please go to: https://www.canalrural.com.br/noticias/soja-despenca-em-preco-e-dispara-em-exportacao/

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