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Brazil set a new record for soybean exports in May, a move that could prompt Chinese importers to look to the United States to fulfill more of their ongoing needs.
In addition, a recent strengthening of the Brazilian real against the US dollar has made US grain prices more competitive, which has already resulted in some flash sales to China.
Brazil exported 15.5 million tonnes of soybeans in May, up 1% from the 15.4 million-tonne record set the month prior. The previous record for the month of May was 12.4 million tonnes set in 2018.
Since the start of the marketing year in February, total Brazilian soybean exports have amounted to 46.7 million tonnes, representing more than half the 83 million tonnes estimated by the USDA for the full year. Brazil’s exports just to China add up to 34.7 million tonnes so far this marketing year, or 74% of the total.
With Brazil exporting a sizable amount of its exportable supply in just the first four months of the marketing year, Chinese importers could increasingly turn to the US for soybean purchases.
Typically, the US ramps up its soybean exports to China in the period from September to January, as new crop supplies are harvested. But given Brazil’s currency appreciation, that switch may happen earlier than normal. While it remains to be seen how US-China relations will evolve, China’s rebuilding of its hog herd will require large amounts of imported soybeans.
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