Grains –
The US soybean export program has begun its seasonal decline and you can start to see things picking up in Brazil now. The soybean line-up for export is still under year-ago levels, but I don’t think it’ll take long for the line-up to exceed last year. In the attached chart you can see the line-up began growing quickly last month and should continue to quickly grow in the weeks ahead. Early soybean harvest is already underway through parts of Mato Grosso and due to quick planting in northern areas we could see this rapidly expand.
Another factor to support an early start to this year’s Brazilian program is the current lack of an export program. Note the huge difference in the corn line-up this year vs. last year. Obviously this is due to the major shortfall in Brazil’s safrinha crop which left a much smaller available supply for export. In 2016 Brazil exported roughly 4.5 mmt in Jan and roughly 5.4 mmt in Feb. Exports this year should come nowhere close to those levels. That will free up port capacity for soybeans and support a quick start to the export program.
Its hard to know just how quickly the program might ramp up this year. I’ve heard some recent estimates suggest Jan exports could be 3-4 times larger than last year, when exports totaled roughly 400k mt. Expect the big surge to take place in February as harvest really advances, assuming there are no major logistical snags with weather or strikes.
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