According to market operators’ expectations, soybean exports from the US in the first quarter of 2024 will increase due to a delay in the planting campaign in Brazil, which is likely to support oil futures prices during the specified period, S&P Global Platts said.
U.S. soybean exports typically peak in October-December and remain stable until at least mid-February, when cheaper Brazilian oilseeds begin to enter the market. But in Brazil since October of this year adverse weather conditions caused by the natural phenomenon El Niño are recorded. As a result, the country’s soybean planting campaign is almost two weeks behind its 5-year average, with Mato Grosso state nearly a month behind.
Thus, the competition on the global soybean market between Brazil and the United States will be quite fierce. According to S&P Global estimates, China will import a record 101 million tons of soybeans in FY2023/24, and the USDA gives an even higher estimate of 102 million tons.
In recent years, Brazil has accounted for the lion’s share of soybean imports to China, about 65%, while the US typically accounts for 25%. This trend is expected to continue in FY2023/24.
In particular, Chinese traders estimate that Brazil’s soybean crop in the 2023/24 season, despite the delay, is likely to be around 158 million tons, making it extremely competitive compared to oil crops of American origin.
Overall, S&P Global Platts predicts that inevitable harvest delays in Brazil will likely boost U.S. soybean sales in the first quarter of 2024. However, once Brazilian and other South American soybeans hit the market (March-April-May) , exports from the USA will decrease sharply. Against this background, analysts forecast the export of soybeans from the USA in FY 2023/24 to more than 1.7 billion bushels (47.9 million tons), which is 11.6% less than the year.