Nov 28, 2018

Crushers in Matos Grosso running out of Soybeans

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The record pace of soybean exports out of Brazil in 2018 has led to a shortage of available soybean supplies for domestic crushers. As a result, some domestic crushers in Brazil have closed down operations for the season while they wait for new supplies.

The Mato Grosso Institute of Agricultural Economics (Imea) reported last week that some crushers in the state of Mato Grosso have ceased operations earlier than normal due to the lack of available soybeans. Other crushers are using this time to conduct their annual maintenance. During October, crushers in Mato Grosso processed 801,340 tons of soybeans, which was 1.5% less than in September and 9% less compared to October of 2017.

Strong soybean prices over the past few months were an incentive for farmers in the state to sell their 2017/18 crop. Imea estimates that farmers have sold over 97% of last year's crop. If a crusher did not stockpile enough soybeans to maintain operations, they probably will not be able to buy any more soybeans until the harvest of the 2018/19 ramps up sometime in early January.

The one good thing for Brazilian crushers is that the 2018/19 Brazilian soybean crop was planted at a record fast pace, which means that the soybean harvest will start earlier than normal as well. It is anticipated that the early soybean harvest in Brazil will start during the second half of December. If crushers want to purchase the first new crop soybeans, they will have to be prepared to outbid exporters who will be paying a premium due to the strong demand from China.