Mar 31, 2014

Lineup of Vessels at Brazilian Ports Down from Last Year

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

The lineup of vessels in Brazil waiting to load soybeans during the month of April is down significantly compared to a year ago. At the current pace of arrivals, the lineup for April is expected to total 5.3 million tons compared to the 8.7 million tons that was in the lineup in April of 2013.

The situation at Brazilian ports was very chaotic last year as importers jostled for early soybean shipments after the drought reduced 2012 U.S. soybean crop. The demand for soybeans this year is much less heated and in fact China has canceled 600,000 tons of soybeans from Brazil and Argentina for March to May shipments.

Last year at this time the lineup of vessels in Brazil was sufficient to handle all the expected exports in April and one third of the exports in May. This year, the lineup is only enough to handle 80% of the expected exports in April and none of the expected exports in May.

The size of the lineup is an indication of the urgency of shipments, but not necessarily of the eventual total exports. In their latest assessment of the 2013/14 Brazilian soybean crop, Conab estimated the soybean crop at 85.4 million tons or approximately 5% more than last year. Abiove is estimating that Brazil will export 44 million tons in 2013/14 or 3% more than last year.

China is the number one destination of Brazilian soybeans with 80% of the soybeans exported from Brazil in January and February destined for China. The primary reason for the reduced lineup is the weaker demand for soybean meal in China due to avian flu in the Chinese poultry flock. The demand for soybean meal in China during February and March was off by 20% to 30% compared to normal.