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March 04, 2019 | Grain Hedge Insights | Kevin McNew | Views: 907

Brazil Soy Exports Decline

Brazil's soybean exports are expected to fall in March due to U.S. competition

Brazil Soy Export Decline as U.S. Beans Are Competitive  

Brazil's soybean exports are expected to fall in March due to U.S. competition, slow farmer sales due to low prices and forecasts for lower soy production have all contributed to a slower Brazilian export pace.    

The outlook marks a sharp contrast from March 2018, when Brazil harvested a record crop and as buyers in China turned to the country's abundant supplies on prospects that Beijing's trade war with Washington would escalate.

Brazilian exports have also been hit by farmer hoarding due to lower port premiums, weak Chicago prices and the appreciation of the Brazilian currency. A professional from a large farm enterprise in Mato Grosso state said this has affected producers' appetite to sell.

Recently China pledged to buy another 10 MMT of U.S. soybeans, indicating more competition for Brazil.  Weekly U.S. soybean exports have been strong indicating that some of the volume has switched from Brazil.

How Does This Impact the U.S. Farmer?  All positive news.  While it’s been a long time since the U.S. soy producer has had some good news the export flows back to the U.S. indicate that low prices help buy business.  While U.S. soy export volume has been anemic, perhaps the Brazilian production cuts combined with some results from the trade negotiations is finally producing some tangible results for the U.S. producer.       

Export Sales Announcement

Private exporters reported to the U.S. Department of Agriculture export sales of 100,500 metric tons of corn for delivery to Colombia during the 2018/2019 marketing year.



U.S. Hard Wheat Competitive in Global Export Markets  

Iraq-The Iraqi government sought FOB bids from U.S. Canada and Australia only.  U.S. wheat was the most competitive. Volume offered at 50,000 KMT at $294.13/MMT and 150,000 KMT at $301.50/MMT

The fact that U.S. hard wheat was the most competitive in the Iraq tender was not a surprise.

Saudi Arabia-Saudi Arabia's state grain buyer SAGO said it had bought 625,000 tonnes of wheat in an international tender.    

At the moment, the majority of the bids are coming from North Europe, with Germany and other Baltic Sea region exporters expected to be among the suppliers.  Some bids from Canada, and the U.S. were also presented.

Bangladesh-Looking for 50,000 KMT of wheat.  At the moment an option-origin bid that could be sourced from the U.S., Canada, Russia or the Ukraine was the primary bid.  

How Does This Impact the U.S. Farmer?  A positive development but it took a violent and prolonged move to the downside in the futures markets to help make U.S. wheat competitive.  The message from the international buyer was clear. For U.S. wheat to win business in the global export market, futures prices need to stay competitive.     


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