Soybean stockpiles in Brazil, the world’s top exporter, have declined from last year, even after farmers harvested a record crop because of increasing demand from overseas buyers, Oil World said.
Brazil’s inventories were 36.5 million metric tonnes on 1 July, 2.7 per cent less than the same time last year, the Hamburg-based researcher said in an emailed report. Supplies were also smaller than a year earlier in Paraguay and Uruguay, while rising in Argentina. South American soybean exports were a record 43.3 million tonnes from January through June, with China a 'key destination', according to the report.
“The unusually high exports have reduced soybean stocks below the year-ago level as of July 1 in Brazil, Paraguay and Uruguay, despite the higher crops,” Oil World said. “Accelerating South American soybean exports have become necessary since April because U.S. soybean exports declined.”
China, the world’s biggest soybean buyer, probably imported at least 7.3 million tonnes of soybeans in June, and purchases in July will be larger than 6 million tonnes, according to the report. The US, the second-biggest shipper, may regain export market share starting in October, as new crops are harvested and lower prices attract buyers, Oil World said.
Brazil’s soybean exports were 6.89 million tonnes in June, up from 6.5 million tonnes the previous year, Oil World said. Domestic processors exported 1.68 million tonnes of soybean meal during the month, equalling a record set in June 2011. Soybean shipments from South America’s top four exporting countries in June were 1.1 million tonnes bigger than last year.
Argentine Inventories
Soybean stockpiles in Argentina, South America’s second-biggest shipper, rose to 40 million tonnes on 1 July, compared with 32.7 million tonnes at the same time last year, Oil World said. That left combined South American inventories at 80.2 million tonnes, up from 74.7 million in 2013.
“Despite the ample supplies, we expect Argentine soybean exports to be relatively limited,” with shipments totalling five-million tonnes in July through February, compared with 4.2 million a year earlier, Oil World said. “Timing and volume of farmer selling will remain critical issues,” and most of the additional supply will be used by domestic processors, it said.
Brazil harvested a record 87.5 million tonnes of soybeans in the 2013-14 season, and output may climb to 91 million tonnes in the 2014-15 marketing year, according to the US Department of Agriculture. Prospects for increasing supplies from the US mean that “there is a high probability of additional downward pressure on soybean prices” if crops escape damage from weather in the next few months, Oil World said.
Bloomberg News, edited by ESM
