Brazil's soybean exports in the first week of December slumped 85% year on year, according to the country's trade data, as market sources said that farmers have sold almost all of their old crop soybean stocks.
Backed by the weak Brazilian real, Brazil's soybean farmers experienced a fast selling pace in 2020, particularly in the first seven months, and were able to offload most of their old crop soybeans – 99.5% as of Nov. 30, seven percentage points above the five-year average.
Brazilian soybeans farmers are currently focused more on domestic sales of their stocks as the return on investment is greater, compared with the export markets, sources said. Currently, Brazilian soybeans are being sold domestically at an average price of $14/bushel, a record high, according to the states' price reports.
The data from Brazil's foreign trade department released on Dec. 7 showed that soybean exports have fallen to 120,374 mt in the first week of December, from 800,000 mt exported in the corresponding period last year.
The country's soybean farmers are holding on to their limited stocks, hoping that prices will continue to rise amid reports of high Chinese demand, inclement South American weather and rapidly falling US soybean output forecast for the 2020-21 marketing year (September-August) given the extensive dry weather in August, market sources told S&P Global Platts.
US soybean output for 2020-21 is forecast at 113.5 million mt, which is 7 million mt below initial estimates on severe drought in the eastern Corn Belt in July and August, according to the US Department of Agriculture's latest report.
Dry South American weather continues to stoke replanting concerns in Brazil as the planted soybeans have not been receiving sufficient rains recently, especially in the Midwest, which is expected to support US futures prices in coming days, analysts said.
