Brazilian Soy Shippers May Be Heading for a Record February – Braun

(Nasdaq) – Brazil has begun its 2016/17 soybean export campaign this month as it looks to start offloading what should comfortably be a record-large harvest.

The shipping schedule on the docket for February is rather aggressive, but there is good reason to believe that soybean exports will push to new highs for the month.

Brazil, the leading exporter of soybeans, is expected to ship roughly 60 million tonnes of the oilseed over the next year – some 17 percent greater than the country’s 2015/16 effort.

The local Brazilian marketing year, which runs from February through January, closed out last month with the South American country shipping more than twice as many soybeans as in January 2016, and a robust pace will likely continue this month.

According to the latest schedule from shipping agency Wilson Sons Brazilian soybean shipments are scheduled 45 percent more heavily than at this time one year ago, as beans are more readily available.

About 4.7 million tonnes of soybeans are scheduled to sail in February, and if this plan comes true, shipments for the month will more than double the levels of February 2016.

This comes despite the fact that total Brazil grain and oilseed shipments slated for this February are down 11 percent from last February’s expectations, owing to a sharp reduction in year-on-year corn exports.

Twice as many vessels are scheduled to set sail for China – the No. 1 buyer of Brazilian beans – in February than were on the books one year ago at this time.

China is also the world’s leading soybean importer and is projected to take in a record 86 million tonnes of the oilseed this year.

Analysts expect the Brazilian soybean harvest to exceed 104 million tonnes, but some believe it could top 107 million.

With a crop potentially as much as 11 percent larger than last year, Brazilian ports must be ready to take on record volumes of beans for export in the next few months.

And as of now, they appear more ready than ever. BY THE PORT Harvest progress in leading soybean producer Mato Grosso is making more beans available in the northern half of the country than usual.

The state is 31 percent harvested as of Feb. 3, faster than any recent season and double last year’s pace. And despite the fact that beans are flooding these ports a little bit earlier than usual, improved logistics and the lack of competition from corn means that vessels can expect slightly shorter wait times than last year.

Santos, located in the state of São Paulo, is the primary port for grains and oilseeds in Brazil and it will be particularly busy this month. Of the country’s total soybean volume on schedule for February, Santos will process 60 percent of it compared with 53 percent during February 2016.

Additionally, some 64 percent more soybeans are in the lineup out of Santos this month than last year at this time, but the wait time for vessels at the port will be five days shorter than last February, so the increased volume should be manageable.

The port of Paranagua is another key exit point for Brazilian soybeans. It is projected to ship 28 percent of Brazil’s February soybean exports – compared with 38 percent in February 2016 – although a slightly larger volume is booked out of Paranagua this February than last.

This is in spite of harvest pace in Paraña, home state of Paranagua, lagging last year’s pace. As of Jan. 30, harvest was 2 percent complete, compared with 17 percent complete by Feb. 1 of last year, so the planned increase in export volume is testament to how well the country’s soybean harvest and movement to ports is transpiring.

Paranagua has shown the most improvement among Brazil’s ports over the last year in terms of traffic management.

According to the shipping schedule, vessels arriving at the southern port this month can expect to sail away with their cargo approximately 15 days later.

If realized, this will be down sharply from the 55-day average wait in February 2016.

Of the soybean-loaded vessels departing Santos or Paranagua this month, at least 95 percent will be heading for either China or undisclosed destinations.

Although ports in the northernmost part of the country will not handle volumes anywhere close to those of their southern counterparts, more than double the amount of soybeans than last year are in this month’s lineup – which has a lot to do with the quick harvest progress in nearby Mato Grosso.

Given that the harvest keeps progressing efficiently, Brazil’s soybean exports should move along in tandem, but the same nuisance that often disrupts harvest can also hamper the shipping efforts – rain.

Activity at Brazil’s grain terminals is notoriously subject to delays under persistent wet weather, as loading must be temporarily halted in order not to ruin the cargo. Luckily for local shippers, anomalously wet weather is not in the cards for the next couple of weeks at the busiest ports.

And as the export campaign pushes forward, heavier rainfalls will become statistically less likely as the peak of the country’s wet season generally ends after this month – clearing the path for Brazil to settle into its role at the top of world soybean trade.