South America Calling

High soybean export premiums have led to extremely strong shipments over the last couple of months, prompting the Brazilian industry to raise its 2014 export number once again.

This week, Abiove, Brazil's soy crusher association, raised its 2014 soybean forecast to a record 45 million metric tons (mmt), 1 mmt higher than last month's estimate and substantially higher than the 42.8 mmt registered in 2013.

Brazil shipped 37.8 mmt in the first seven months of 2014, up 19% on last year, and exports are expected to remain brisk through October when the U.S. crop becomes available.

Exporters have drawn out stocks amid declining international prices by offering substantial premiums on top of Chicago futures.

The premium for delivery at Paranagua port in September is currently $2.50 per bushel, much higher than the $1.05 per bushel offered at the same time last year.

As a result, Brazilian farmers have been partially shielded from the slide in soybean quotes.

To accommodate the higher soybean export projection, Abiove lowered its 2014 processing forecast. It estimated Brazilian crushing will total 36.8 mmt, down from last month's estimate of 37 mmt but higher than the 36.2 mmt crushed last year on a larger crop.

Brazil produced 86.5 mmt of soybean in 2013-14, up 6% on the year before, according to Abiove.

Brazil will see imports rise to 500,000 metric tons (mt) from 283 mt. The soybeans largely come from the growing number of farms just over the border in Paraguay.

(AG)

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