US farm officials forecast a tough autumn battle between
Brazilian and US soybean exports, as the South American country 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 tonnes, stood by
a forecast of soybean exports of 39.0m tonnes for 2012-13.
The export figure represents a record, by a distance, even
though coming in 875,000 tonnes below the USDA's 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 bottlenecks, had fallen below 960,000 tonnes
last month from 1.57m tonnes the year before.
Many commentators had been expecting a figure near to 2m
Late export season?
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
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 $1.00, 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.
In the latest evidence of the clamour for US soybeans, the
USDA on Tuesday revealed the sale of 330,000 tonnes of 2012 crop to an "unknown"
foreign buyer, suspected to be Chinese.
"Soybean crush margins throughout the world are very
positive and crushers do not want to miss out on any of these positive margins,"
Darrell Holaday at Country Futures said.
"Chinese crushers do not want to hear about shipping delays
out of Brazil. That is why they are pushing to buy US soybeans. "
The US has already shipped more than 1.1bn bushels of soybeans
in 2012-13, and has commitments for getting on for a further 200m bushels,
meaning that half way through the season it may have just about wrapped up a
full-year export programme the USDA has estimated at 1.35bn bushels.
The strong demand has raised ideas of the US being forced to
turn to South American imports itself late in the season to tide crushers over while
they await the next American harvest coming onstream.
Key reports ahead
The US Department of Agriculture on Friday releases its
latest Wasde crop report, at which the US soybean balance sheet, and estimates
for Argentine and Brazilian crops, are expected to be highlights.
On Thursday, Conab, the Brazilian crop bureau, will also
update its forecast.
The USDA's current estimate is 83.5m tonnes, with Conab's at
*Separately, Lanworth on Wednesday trimmed by 200,000 tonnes to 80.8m tonnes its forecast for Brazil's soybean harvest.