Brazilian Farmers Expected to Plant Record Soybean Acres, Grab More Market Share10/10/2018
Brazilian soybean farmers are expected to plant a record-breaking crop this year and then export record amounts in the 2018-19 marketing year. Growers see continued opportunities to grab U.S. market share in China as the trade war between the two countries shows no sign of ending.
USDA’s Foreign Agricultural Service raised its forecast for Brazilian soybean exports next year to 75.5 million metric tons. That’s up from the 75 million tons expected this year and 69 million tons the year before. The new FAS forecast is also higher than the official USDA forecast, which is still at 74.5 million tons.
Brazilian farmers, FAS says, are bolstered by the desperation of Chinese importers to buy as much soy as it can from South America and avoid the 25 percent tariff that Beijing levied against the U.S. crop as part of its growing trade war with the U.S.
Brazilian exports to China would be even higher next year – if not for competition with Argentina, the FAS report noted. Argentina suffered a major drought this year, curtailing exports and forcing imports.
Record exports next year are expected to draw down heavily on stocks, but Brazil isn’t concerned, FAS said.
“The assumption in Brazil is that should there ever be a shortfall for domestic consumption, Brazil could always bring in additional supply from neighboring producers,” the report said. “Instead, traders and producers alike are clearing out every last bin in order to take advantage of the upside in prices stemming from international trade tensions.”
But don’t expect any imports from the U.S.
“Despite some indications in the press that Brazil may import a large volume of soybeans from the United States, (FAS) does not anticipate this,” the report said. “According to … conversations with traders, the infrastructure in Brazilian ports is not adept for the import of grains.”