Brazil's soybean harvest could be 70% sold when it starts, says StoneX

Brazil will not only have a late soybean harvest in the 2020/21 harvest, due to the delay in planting, but when it starts to intensify, at the end of January, it is possible that up to 70% of the production expected for the season will already be sold, evaluated this Thursday the consultancy StoneX.

This means that soybean prices, which exceeded 160 reais per bag at the port of Paranaguá (PR) this week due to low availability, a level never seen before, should see little relief when harvesting work begins.

The delay in planting due to the delay in regularizing spring rains this year, however, does not represent problems for now for productivity or the size of the planted area, since the crop must be sown within the appropriate window for the oilseed, he said. StoneX market intelligence analyst Ana Luiza Lodi told Reuters.

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The consultancy, therefore, is maintaining its area growth projection of 3% compared to the previous season, to a record of almost 38 million hectares, as predicted at the beginning of the month in its monthly reevaluation, which would result in a record harvest of 132, 6 million tons, an increase of 7% compared to the previous cycle.

The assessment takes into account investments that are being made in farming, given record prices and strong sales prices.

In StoneX's accounts, the producer has already sold 53% of Brazilian production in advance, or more than 70 million tons, a volume greater than the harvest in Argentina, the third largest producer in the world after the USA and Brazil.

“We have to see how the producer will behave, with these climate issues, he ends up becoming more restrained. But in three months, when the harvest begins, something between 60% and 70% of the harvest may already be sold,” said the analyst.

“Prices may, when the harvest gains strength, drop, but nothing so significant, because we will start the 2020/21 harvest with significant volumes sold,” he stated.

The analyst also said that the delay in planting in the country, the largest global producer and exporter of soybeans, has led some producers to renegotiate soybean deliveries previously scheduled for January.

Most of them, according to market reports, she said, are postponing deliveries until February, when the harvest tends to be more concentrated.

Despite the greater concentration at the start of the harvest in February, the analyst said she did not believe in logistical and port problems, due to recent investments made to improve flow.

“There shouldn’t be any problems at ports, there may be an increase in freight costs, but there shouldn’t be a lack of logistics”, he commented.

However, Brazilian soybeans will begin to be shipped a little later, which should reinforce the United States' export window, he recalled.

“So much so that there are already producers renegotiating contracts, renegotiating to deliver in February”, he highlighted.

While in 2019/20 Brazil had, at the end of January, 10% of the harvest harvested, and in 2018/19, 20% of the harvest carried out, in the current season with “great certainty” there will be available less than 10% of the soybeans projected for the cycle, exemplified the analyst.

For Ana Luiza, soybean crushers are aware that January is traditionally not a month of great supply. But this season, the low supply from the previous harvest, after strong exports and large domestic consumption, will intensify the dispute with exporters.

“We are going to end 2020 practically without soybeans, so in January, the longer it takes for the new crop to enter the market, the more it reinforces the supply restriction,” she said, assessing that, although the rains begin to settle down for planting, it will not be possible take up the delay.

Mato Grosso, which usually leads harvesting efforts, had planted less than 10% of the area as of last Friday, compared to more than 40% in the same period last year.

CORN

The consultancy also did not change projections for first harvest corn, with a harvest estimated by StoneX at 27.9 million tons, but is monitoring a drought in Rio Grande do Sul, an important producer of the cereal in the summer.

Regarding the second crop, planted after the soybean harvest, Ana Luiza said that the delay is worrying, but commented that producers intend to expand the area in the face of good prices, and should advance more or less depending on weather signs about whether to extend it or not. the rains.

Source: Notícias Agrícolas

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