Accelerated soybean harvest in Brazil puts pressure on quotes

After recent rains in Argentina stabilized soybean crop forecasts, traders turned their attention to Brazil’s record soybean harvest. The reduced rainfall allowed for an earlier harvest, prompting local analysts to raise their forecasts, which immediately sent prices lower.

On forecasts of increased production in Brazil, March soybean futures on the Chicago Board of Trade fell by 1.6% yesterday to $377.6/t (-2.8% for the week, -2.4% for the month), despite USDA experts lowering the forecast for the soybean harvest in Argentina by 3 million tons.

Brazilian agency AgResource Brasil has raised its soybean harvest forecast in the country from 172.07 million tons to a record 172.28 million tons due to improved yields and an increase in sowing area compared to last year from 46.1 to 47.47 million hectares.

Brazilian soybean processors’ association Abiove left its harvest forecast at 171.7 million tons, significantly exceeding the USDA’s February forecast of 169 million tons.

According to AgRural, as of February 6, soybeans in Brazil have been harvested on 15% of the area (+6% in a week), although last year this figure reached 23%. The most active harvesting is taking place in the state of Mato Grosso, despite not very favorable weather conditions. In the state of Paraná, a third of the soybean crops have already been threshed.

Experts warn that the slow pace of soybean harvest could delay planting of the second corn crop, which is due to finish in February. In Brazil, the second corn crop is planted in the same fields after the soybean harvest.

Safrinha corn has now been planted to 21.8% of the planned 15.37 million hectares (+11% in the week), which is lower than last year’s 28.3% but higher than the 5-year average of 14.2%. Despite the high planting rates in Paraná and Mato Grosso do Sul, significant delays are observed in the states of Mato Grosso and Goiás.

In Ukraine, export prices for GMO soybeans remain at $385-388/t or UAH 18,200-18,400/t with delivery to Black Sea ports, but export demand is gradually decreasing as supplies from South America increase.

Export prices for non-GMO soybeans also remain at $410-415/t or UAH 19,500-20,000/t with delivery to ports or the western border of Ukraine, while processors maintain prices at UAH 19,000/t with delivery to the plant.

Tags: prices, soybean, Argentina, Brazil