Monday
May 29, 2017
Friday, May 12, 2017

Soy demand soars as top growers ship at record pace

Exports from the US and Brazil reach highest ever for this time of year

The world can’t seem to get its fill of soybeans, it seems. Exports from the United States and Brazil, the world’s largest growers, are the highest ever for this time of year and demand is poised to eclipse earlier government forecasts for a record this season. While big harvests have left inventories at all-time highs, prices have started rebounding from last month’s one-year low.

That’s because cheap supplies are fuelling voracious consumption to make soy-based animal feed and cooking oil, especially across Asia.

“Demand is just silly good,” said Dale Durchholz, senior market analyst at Illinois-based AgriVisor. “The world economy is improving, and as incomes rise, consumers demand more meat, dairy and eggs. Traders have underestimated demand while focusing on the big supply.”

China, the biggest buyer, boosted first-quarter soybean imports by 20 percent from a year earlier, and the pace is twice what it was as recently as 2010, US government data shows. China maintains the world’s largest pig herd, and it is using more soy-based feed after the government imposed restrictions on imports of a corn-based alternative.

“China does not want to get caught without soybeans,” said Pedro Dejneka, a partner at Chicago-based MD Commodities, which also has offices in Brazil. He speculated that China’s imports may reach 91 million metric tons in the year ending September 30, topping an estimate last month by the US Department of Agriculture for a record 88 million, he said.

That’s up from 83.2 million a year earlier. Exports by the US, the top global grower, are running at the strongest pace in two decades, at a time of the year when shipments are usually slower. Soybeans inspected for export rose to 521,218 tons in the week ended April 27, up 62 percent from a year earlier and the most for that period since 1997, US government data shows.

Since September 1, at the start of the harvest, shipments are 15 percent above last year’s record pace. But that isn’t just because of China. There have been more purchases from many other nations including Indonesia, Thailand and Pakistan.

Brazil is expected to be the largest shipper this year. In the first four months of 2017, exports rose to 27.7 million tons, 17 percent more than a year earlier, according to Anec, an exporters group. China accounted for 21.6 million of the total, up 18 percent.

“World demand for soybeans was surprising in the past months,” and expectations are being revised because “Chinese imports remain very strong,” said Vinicius Ito, an analyst at Ecom Trading.

That doesn’t mean the global surplus is going away anytime soon. Farmers in the US and Brazil, who together account for two-thirds of all production, had their biggest harvests ever, and the USDA predicted last month that global stockpiles will jump 13 percent this season to a record.

Still, many Brazilian growers are holding on to more of their crop because prices in the local currency, the real, are so much lower than a year ago, which means rising domestic inventories and less competition for US exporters. Only 51 percent of this year’s Brazilian crop was sold as of April 28 — the lowest in seven years and well behind the five-year average of 64 percent on that date, according to the Brazil-based consultancy Celeres.

— Bloomberg

  • Increase font size Decrease font sizeSize
  • Email article
    email
  • Print
    Print
  • Share
    1. Vote
    2. Not interesting Little interesting Interesting Very interesting Indispensable






  • Increase font size Decrease font size
  • mail
  • Print




    ámbito financiero    ambito.com    Docsalud    AlRugby.com    

Edition No. 5046 - This publication is a property of NEFIR S.A. -RNPI Nº 5293935 - Issn 1852 - 9224 - Te. 4349-1500 - San Juan 141 , (C1063ACY) CABA
Grupo Indalo