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Soybean Buyers Turn Attention to Brazil’s 2021 Harvest
11.02.2021 09:47 "Agro Perspectiva" (Kyiv) —
According to the report of the USDA Oilseeds: World Markets and Trade (February 2021), as soybean supplies in the United States tighten seasonally, buyers are turning to South America, particularly Brazil, where harvest is getting underway. Production in Brazil is currently forecast at 133 million tons, up 7 million from last year. However, a lower carryin reduces yearover-year supply growth to 5 million tons. This opens the door for a repeat of last year’s market conditions where limited availability of Brazilian soybeans late in 2021 reduces export competition for U.S. new-crop soybeans. Global demand remains strong with ship lineups in Brazil exceeding 11 million tons in early February. However, a portion of the lineup may also reflect this year’s delayed harvest. Reports in Mato Grosso show soybean maturity running behind last year, which translates into a later harvest and, therefore, slower movement of soybeans to port. The large lineups also point to a quick run-up in export volume over the next few months. BR163 is now completely paved allowing easier transport to northern ports and potentially increasing volume shipped through these ports. A complete utilization of ports both north and south would allow monthly soybean export volume to exceed historic norms and potentially raise total export volume through September compared to 2020. With strong export and domestic demand coupled with the smaller supply growth forecast for 2021, an increased export pace would lead to a quicker draw-down in supplies by October. Consequently, U.S. producers would face limited competition from Brazilian exports at harvest, similar to the situation observed in the last quarter of 2020.
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