Brazil's soybean exports in the first three weeks of September slumped 42% month on month, according to the country's trade data, with sources signaling stockpiling by farmers as surging oilseed prices restricted supplies of raw beans.
Data from Brazil's foreign trade department released Sept. 21 showed soybean exports fell to 2.92 million mt over Sept. 1-20, from 5 million mt exported in the corresponding period of August.
The country's soybean farmers are holding on to their beans stocks in the hope of prices rising amid reports of US soybean output stagnating on worsening crop conditions, market sources told S&P Global Platts.
The condition of the US soybean crop has fallen by two percentage points week on week to 63% rated good to excellent, a fall of 10 points within a month, data released Sept. 14 by the US Department of Agriculture showed.
A declining US soybean crop rating is expected to boost the prevailing upturn in soybean prices. November soybean futures are already trading around a 27-month high of over $10/bu, and are expected to touch $10.5/bu in the coming weeks on strong demand from China, an analyst said.
Soy hoardings by farmers have also supported the basis at Brazilian ports.
Platts assessed SOYBEX FOB Santos for November loading at $443.70/mt on Sept. 14, up 9% month on month.
Backed by a weak Brazilian real, which has lost over 34% of its value year on year as of Sept. 22, the country has already sold over 95% of its soybean crop for the current marketing year that started Feb. 1, up 18 percentage points from a year earlier, an agro analyst said. It had also forward contracted almost 45% of next year's crop as of Aug. 30, a year-on-year rise of 20 percentage points.
Based on the port lineups, Brazilian soybean exports in September are projected at 3.5 million mt, down 24% year on year.
Over 65% of Brazilian soybean shipment in September are expected to head towards China, the world's top oilseed consumer.
In the first eight months of the calendar year, Brazil exported 75 million mt of soybeans, up 34% year on year, with 73% of these shipments purchased by China.
The continuing recovery in China's swine and poultry production growth is expected to push up soybean demand in 2019-20 and 2020-21, market sources said.
Boosted by a rising pig herd, China's soybean imports in the 2019-20 and 2020-21 marketing years (October-September) are forecast to touch all-time highs of 98 million and 99 million mt respectively, the USDA said in August.
China lost over 50% of its swine population to the African Swine Fever epidemic, which started in August 2018. Following quarantine measures and the culling of more than 200 million pigs, the country's pig population has been on the path to recovery since late 2019.
For October and November, its soy import coverage is estimated to be almost complete, a Chinese analyst said. Chinese buyers are now mostly focused on booking December shipments from the US and March shipments from Brazil.
