The ongoing drought in Brazil has slowed down soybean sowing in the country. This is expected to have a major impact on Brazil's export supply in January, something that can benefit the United States.
Soybean listings on the Chicago CBoT ended Monday, Oct. 12 at $10,33 per bushel, down $0,35 from a week earlier. That drop in the listing was caused by predicted precipitation. However, it now appears that the weather forecasts were slightly less favorable than expected. There is no precipitation and it is very hot in parts of the country, even by Brazilian standards, making it too dry to sow the soybeans. As a result, the CBoT listing is now looking upwards again and is trading at $10,44 per bushel on Tuesday, October 13.
Consequences for export
The delayed soybean sowing will also affect the country's export supply in January 2021, according to AgRural consultancy on Wednesday, October 14. Usually in January a large part of the Brazilian soybean harvest is ready for shipment. For example, at the end of January 2020, 9 million tons of soybeans had already been harvested in Mato Grosso, the country's main production region. That's 25% of the total crop in that state. It is expected that this percentage will not be achieved this year.
The slowdown in sowing is also reasonably positive news for US soybean sellers, who usually compete directly with Brazil on the world market in January. Now, U.S. sellers may be able to sell on a large scale throughout January to the main buyer: China.