US farm officials forecast a tough autumn battle between Brazilian and US soybean exports, as Brazil attempts to make up for a poor start to 2012-13, with shipments hurt by logistical hiccups. US Department of Agriculture staff in Brasilia, while cutting their forecast of the Brazilian soybean crop to 82.5m tons, stood by a forecast of soybean exports of 39m tons for 2012-13, report agrimoney.Click here to see more...
The export figure represents a record, by a distance, even though coming in 875,000 tons below the USDA official forecast, on the basis of a February-to-January marketing year.
The report also follows the release of government data showing that Brazilian soybean shipments, dogged by “deficient port logistics”, poorly maintained roads and rail bottle-necks, had fallen below 960,000 tons last month from 1.57m tons the year before.
The USDA staff said in a report: “Traders hope to offset the slow early export season with stronger exports in September and October,” a period when US supplies would typically be building with the onset of its own harvest. Indeed, the briefing noted the need for Brazil’s supplies to be “price competitive with the upcoming US crop”. Brazil’s price keenness was being assisted by the weakness of its currency.
“The continued exchange rate of the Brazilian Real vis-à-vis the US dollar at around R 2.00 to a greenback coupled with less competitive crush margins, has continued to favour exports.”
The comments come amid continued orders for US soybeans, despite their thin supplies and relatively high prices, demand attributed largely to the difficulty in obtaining soybeans from Brazil, with ship waiting times at ports estimated at some 60 days.
Chris Mahoney, the director of agricultural products at Glencore, on Tuesday underlined the extent of Brazil’s infrastructure shortfall, flagging “tremendous waiting times” in the port of Paranagua, which he estimated rising from 20 days at peak time in 2011 to 45 days last year.
“I think 2013 will be considerably worse because we have a very large crop in Brazil,” he told investors.
The USDA report said that ship waiting times have “never been seen to this degree so early in the season”, with queues normally not beginning to lengthen until March or April, when the start of the cane crushing season, and ramp up in sugar exports, adds to the pressure on logistics.