Sep 28, 2020
Soybean Supply Situation in Brazil Getting even Tighter
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The soybean supply situation in Brazil has been tightening for weeks and now it appears that it is going to get even tighter than anticipated. It was announced last week that crushers in Rio Grande do Sul are importing three cargos of soybeans from neighboring Uruguay. This is on top of the soybeans they have already imported from Paraguay. Brazil may end up importing as much as 800-900,000 tons of soybeans or more before the new crop becomes available sometime starting next January.
Without additional imports, the projected carryover stocks in Brazil could be some ridiculously low number of under 500,000 tons, which would be lowest since the government started keeping records. That low of a carryover is impossible because it would equate to only a couple day's supply. The market's role will be to ration demand with higher prices.
Spot soybean prices in Brazil are record high already and getting higher. To make the situation even worse, farmers are holding onto any soybeans they may have left from last year's crop in the hope of even higher prices. There are reports of bids as high as $12.00 for December deliveries.