Brazilian soybean exports have started to slow after reaching a record monthly pace during May as much of that country’s record 2012-2013 crop has now moved into the market. Brazil exported 6.57 million metric tons (mmt) of soybeans in June, down from 7.95 mmt in May, according to data released by that country’s trade ministry on Monday.
Brazil's trucking union is holding a 72-hour strike that might delay movement of further soybean and corn crops to ports, but the action, which is due to end on Thursday, will not affect exports. Exporters have sufficient stocks at ports to continue loading.
Protests slowed traffic into Brazil’s main grain and soybean export port of Santos on Monday and Tuesday, but exports were continuing as normal, according to the Santos Port Authority, which manages the port's public corridor.
Brazilian producers have sold about 78% of their 2012-2013 soybean crop, up from 71% in late May, but behind the 92% of the previous crop that had been sold a year ago, according to Brazilian market consultant Safras & Mercado. This data suggests producers are still holding roughly 18 mmt of soybeans.
Producers sold about 60% of the crop before it was even planted late last year, taking advantage of high prices following the U.S. drought, but sales then slowed as soybean prices fell, before picking up last month on stronger Chicago futures prices, Safras said, according to Reuters News Service.
Weakness in the value of the Brazilian real against the dollar also likely helped boost sales. The real depreciated by about 4% against the dollar during June. The weakness of the real will boost Brazilian production costs for 2013-2014, though, as most inputs are imported and priced in dollar terms.
IMEA, the state agricultural economics institute for Brazil’s largest soybean-producing state of Mato Grosso, now estimates that production costs there will rise more than 21.5% for the 2013-2014 crop.
Despite the higher costs, Brazilian soybean plantings should continue to expand due to firm prices over the past couple of months and increased government financing for producers.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.