Brazil's soybean exports continued to outpace last year's volume in the first three weeks of May due to higher daily average shipments, which is likely to put pressure on US soybean exports, sources told S&P Global Platts May 25.
Brazil exported 12.6 million mt of soybeans in the first three weeks of May, compared with 12.24 million mt in the same period of May 2020, according to a foreign trade department report released May 24. Daily soybean shipments averaged 0.84 million mt, up from 0.7 million mt in the same period last year, the report said.
According to market analysts, Brazil's May soybean shipments are expected to surpass 16 million mt, up 2 million mt year on year.
A global soybean supply surge is widely expected following Brazil's export spike since April, which is likely to put pressure on US soy futures prices in the coming weeks.
CBOT soybean July futures were seen trading at $15.3450/bushel at 0530 GMT May 25, down 63 cents from a week earlier.
Almost 80% of Brazil's soy shipments were heading to China in April, analysts said. This is in stark contrast to the first quarter of 2021, when the Brazilian shipment volumes to China were very small.
Brazil typically supplies over 80% of its soy shipments to China between February and July, but due to harvest delays in Brazil and slackening crushing activities in China in Q1, exports on the route were lower than usual.
High soy prices and low crush margins have forced many China-based crushers to operate below capacity since January, analysts said.
Nonetheless, China is expected to ramp up soybean purchases from Brazil, which is selling its beans 30 cents/bushel cheaper than US-origin beans.
Until August, Brazil is likely to export record volumes of soybeans to make up for lost opportunities in Q1, market sources said.
Domestic soybean demand in Brazil has been rising since 2020. As a result, the country's oilseed imports have also soared and it is likely to import over 90,000 mt of beans in May.
According to the foreign trade data, Brazil imported 69,000 mt of beans in the three weeks of May, compared with 43,000 mt in four weeks of May last year.
According to estimates from market sources, Brazil is expected to produce a record 135 million mt of soybeans in the 2020-21 marketing year (February-January) and export an all-time high volume of 85 million mt.
