By Daniele Siqueira
The last time I wrote here, in mid-December, there were all sorts of rumors around the 2020-21 Brazilian soybean crop, because it was planted about 30 days later than normal due to irregular rains in September, October and November.
The Brazilian delay was one of the main bullish fundamentals at that time in Chicago. Not that the crop was necessarily headed for a disaster (soybeans don’t fail during the vegetative stage!), but because the delay, combined to virtually zero beginning stocks, would leave Brazil out of the export game in January.
That would make room for more U.S. sales, especially to China — something that is really happening now and helping boost international prices even further, along with a very tight supply and demand balance in the U.S., speculations around the crop development in Argentina (it’s doing fine so far, by the way) and tensions between that country’s government and farmers.
In normal years, most of the soybean crop in Brazil’s top producing states (Mato Grosso and Paraná) would be pretty much done now in mid-January. This year, however, we still have a long way to go, and weather conditions will be crucial until at least early February in those states and late March in others.
Behind, but in good shape so far
Right now, after beneficial rains seen throughout December and in the first half of January, the Brazilian crop is in good shape, with the main production forecasts within the 130-133 million metric ton range, compared to 125 million in 2019-20.
But, with only 0.4% of the area harvested by Jan 14 (click here to see AgRural’s numbers), Brazil will be able to start to export at full steam only in late February/early March. The second corn crop, which is planted right after the soybean harvest, will also be delayed.
Speaking of exports, 2020 was another great year for Brazilian soybeans, with 83 million metric tons shipped, 12% up from 2019 and very close to the record of 83.3 million metric tons in 2018. With about 60% of the new crop already sold, exports are expected to at a similar level in 2021.
China had the starring role in 2020, as usual, importing 60.6 million metric tons of soybeans from Brazil. But other destinations were very interesting supporting actors, with 22.4 million metric tons, 39% up from the previous year.
The increase to other destinations was spurred by the weaker Brazilian real, which made soybean prices attractive both to Brazilian sellers and foreign buyers. The European Union, the second main destination after China, imported 7.7 million metric tons of soybeans from Brazil in 2020, 61% up from 2019.
That said, it’s especially funny, to say the least, that French President Emmanuel Macron, in yet another attempt to divert the attention of his people to matters other than his own government, started the new year saying that France should stop importing soybeans from Brazil to avoid importing the “Amazon deforestation.”
There are so much ignorance and prejudice (not to say misconceptions, misinformation and bad faith) in that statement, and this is such a complex subject, that I would need much more space here to explain how wrong he is.
Since I don’t have all that space and there are more important things to do than wasting my time with people like Monsieur Macron, I’d just like to say that it’s been a few years already that Brazilian farmers cannot access any kind of credit to grow soybeans (or any other crop) if they fail to meet very strict environmental criteria.
Am I saying that there is no deforestation in Brazil? No, I’m not. The problem exists and has to be addressed. But the main cause of deforestation/fires shown on TV around the world (sometimes with pathetic images shot somewhere in Africa, not in Brazil) is not soybean production. If it was, Macron could avoid “importing deforestation” from Brazil just switching to other origins, since the U.S., Argentina and Paraguay don’t “grow soybeans in the Amazon.” But I suspect that it’s much easier for him (and others like him) to put up a social media show and get some likes.