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December 10, 2020

China Booking New Crop Brazilian Soybeans for March Shipment

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Brazil has exported soybeans at a record pace in 2020 and now the available soybean supplies in Brazil are down to very low levels. This can be seen in the amount of soybeans being exported in December. According to the Brazilian Foreign Trade Secretariat (Secex), Brazil exported 120,400 tons of soybeans during the first four days of December and that amount is expected to continue declining as the month progresses. In December of 2019, Brazil exported 3.27 million tons of soybeans.

Thus far in 2020, Brazil has exported 89 million tons of soybeans compared to 72 million tons during the same period in 2019.

With current supplies of soybeans nearly exhausted, there are reports that China is now booking Brazilian soybeans for March of 2021 shipment. The consulting firm Patria Negocios, reported earlier this week of China's interest in new crop soybeans from Brazil.

Dry weather earlier in September and October delayed the soybean planting in Brazil and as a result, the start of the soybean exports will be delayed as well. The first few soybeans in Brazil may start to be harvested beginning about January 15th. These are irrigated soybeans that were planted September 10th in the state of Parana or September 15th in the state of Mato Grosso. For the non-irrigated soybeans, the harvest will not enter full swing until probably the beginning of February.

As an example of how the harvest will be delayed this growing season, by the end of January 2020, farmers in the state of Mato Grosso had harvested approximately 11 million tons of soybeans. It is estimated that by the end of January 2021, farmers in the state will have harvested approximately 4 million tons of soybeans. In fact, there are reports that some farmers in Mato Grosso are in the process of renegotiating their contracts with the grain companies because they will not be able to deliver the soybeans at the predetermined date such as January 15th.

Many of the domestic crushers in Brazil have suspended operations due to a lack of available soybeans. Therefore, it is expected that the crushers will outbid the exporters for the first available soybeans from the 2020/21 crop.