Global Markets: Oilseeds – Soybean Buyers Turn Attention to Brazil’s 2021 Harvest

Soybean harvest. ©Debra L Ferguson

As soybean supplies in the United States tighten seasonally, buyers are turning to South America, particularly Brazil, where harvest is getting underway. Production in Brazil is currently forecast at 133 million tons, up 7 million from last year.

However, a lower carryin reduces year-over- year supply growth to 5 million tons. This opens the door for a repeat of last year’s market conditions where limited availability of Brazilian soybeans late in 2021 reduces export competition for U.S. new-crop soybeans.

Global demand remains strong with ship lineups in Brazil exceeding 11 million tons in early February. However, a portion of the lineup may also reflect this year’s delayed harvest. Reports in Mato Grosso show soybean maturity running behind last year, which translates into a later harvest and, therefore, slower movement of soybeans to port.

The large lineups also point to a quick run-up in export volume over the next few months. BR163 is now completely paved allowing easier transport to northern ports and potentially increasing volume shipped through these ports. A complete utilization of ports both north and south would allow monthly soybean export volume to exceed historic norms and potentially raise total export volume through September compared to 2020.

With strong export and domestic demand coupled with the smaller supply growth forecast for 2021, an increased export pace would lead to a quicker draw-down in supplies by October. Consequently, U.S. producers would face limited competition from Brazilian exports at harvest, similar to the situation observed in the last quarter of 2020.

Lebanon Soybeans and Sunflower Oil Added to the USDA Database

Soybean and sunflower oil balance sheets have been added to the USDA database for Lebanon. Sunflower oil was added starting in marketing year 2001/02. Since 2014/15, Lebanon has imported more than 100,000 tons per year of sunflower oil.

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As of 2019/20, Lebanon is now the 11th-largest importer of sunflower oil in the FAS database. Lebanon is not a major importer or consumer of sunflower seed nor sunflower meal, and thus, tables were not added for these commodities.

Additionally, soybeans were added to the database starting in 2014/15. Lebanon began ramping up soybean imports after opening a new crush facility in August of 2015. Imports reached a record of more than 300,000 tons in 2018/19, before falling by a third in 2019/20. Soybean meal and oil were already included in the database.

Over the past 3 marketing years, the United States has grown soybean market share in Lebanon. In 2016/17, the United States sold no soybeans to Lebanon but increased market share to 50 percent in 2019/20. Continued demand growth for soybeans in Lebanon signal its potential to be an new market for U.S. producers in the coming years.

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