U.S., Brazil in ‘tug-of-war’ over soybean exports

BOCA RATON, Fla. — The United States is in position to boost exports in the months ahead. But competition remains strong in South America, where farmers are sitting on ample stocks and just planted the 2023-2024 crop.

“There are more old-crop soybeans in Brazil than there’s ever been,” Aaron Edwards, commodity risk adviser for Roach Ag, told the RFD Radio Network. “But there’s also more demand in Brazil than in the past.”

“The real question is do new-crop U.S. soybeans get the China business or do old-crop Brazilian beans get the China business?” he said. “It’s a pretty strong tug-of-war.”

Overall, the U.S. Department of Agriculture estimates U.S. soybean exports could decline 35 million bushels this year to 1.76 billion due to increased competition from South America.

However, U.S. soybean crush is expected to increase 10 million bushels to 2.3 billion driven by higher soy meal exports and domestic demand for soy oil.

“Personally, I think we could get a friendly demand story for U.S. bean exports,” Roach said. “As of now, that’s a neck-and-neck race.”

One factor that could tilt the competition in favor of the United States near-term involves weather challenges as Brazilian farmers planted the 2023-2024 soybean crop.

The challenges could tempt Brazilian soybean users to hold more of the old crop rather than export it.

“Some of it will need to be replanted (in Brazil),” Edwards said. “In the south, some of it got flooded out, and in the north, it was too dry to get some out of the ground.”

The weather extremes occurring during planting in South America are part of a shift from a La Niña pattern to El Niño.

“We’ve had three years in a row of La Niña and now we’re in year one of El Niño,” Edwards said. “El Niño tends to produce more rain in the south and less rain to the north (in South America).”

Brazilian farmers are expected to plant a record 112 million acres of soybeans for 2023-2024, up 2.5% from the past season, while cutting corn plantings by 5% to 52 million acres, according to the National Supply Company in Brazil.

If realized, Brazilian bean production could reach a record 5.95 billion bushels in the year ahead while corn output could slip 9.5% to 4.7 billion bushels. Brazilian corn exports subsequently could decline by 27% in the year ahead.

This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association.