News that the U.S. sold 330,000 tonnes of soybeans to “unknown destinations” in 2012-13 — presumed to be China — and 345,000 tonnes to China for 2013-14 was representative of “a short-term window — a little frosting on the cake and not a market moving development” he asserted.
Nelson said the overwhelming fundamental arguing for a drop in U.S. soybean exports is price.
“Brazil has the ability to export cheaper products than we do,” Nelson said. “No one wants to buy high-priced soybeans.”
He said the Chinese had such strong immediate needs for supplies that they made the recently announced purchases on the basis of availability rather than price. But he said those imperatives will change when logistics in Brazil become more favorable.
He said Brazilian soybeans will win out in the export market as soon as the current 45-day delay at Brazil’s main port of Paranagua is eradicated. The extreme bottleneck has come about because Brazilian producers are shipping both corn and soybeans to port simultaneously — an unusual situation that will begin to correct itself in coming weeks, he said.
Nelson was definitive about what cheaper Brazilian soybeans mean for the American export market.
“There will be a point when U.S. soybean sales drop off to near zero,” until less-expensive Brazilian supplies are no longer available for sale, he said.
The February World Agricultural Supply and Demand Estimates projected Brazilian soybean exports at 38.4 million tonnes in 2012-13. The March WASDE with updated information will be released on March 8.
