Brazil’s government on Tuesday raised by two million tonnes its projection for soybean exports in the 2017/18 crop to 76 million tonnes amid strong Chinese demand, reducing the crop’s end-stocks to the lowest on record.
Agricultural statistics agency Conab raised by 300,000 tonnes its projection for the country’s 2017/18 soybean crop from August to 119.3 million tonnes, the second-highest output ever, but even with that increase soy end-stocks fell to 434,000 tonnes from 638,000 tonnes last month.
The report was another indication that Brazil would likely run out of soybeans before the new crop starts to reach warehouses around January, which could force Chinese soy processors to buy from the United States despite the 25 percent additional import tariff imposed by China in its trade spat with the Trump administration.
Conab said in its report that Brazil is likely to continue to send soybeans to China until there is nothing left, due to the weak currency and high port premiums.
The agency said that even Brazil’s soy processing industry is suffering due to the trend, unable to increase processing volumes despite high international prices for soyoil and soymeal. It hinted at possible soy imports.
“There is a remote chance that Brazil will need to import soybeans to supply the local industry,” said the government agency in the monthly grain crop report.
Conab cut its projection for corn exports in the 2017/18 crop to 25.5 million tonnes from the 27 million tonnes seen in August, reflecting a smaller harvest and strong local demand.
It estimated cotton lint production at 2 million tonnes versus 1.97 million tonnes previously.
The agency also raised its estimate for this year’s wheat crop to 5.24 million tonnes from 5.14 million tonnes projected last month.