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July 23, 2020

Brazil to Export Record Soy in July, but it is also Importing Soy

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Record soybean exports out of Brazil, which started last March, are expected to continue through July. According to the Foreign Trade Secretariat (Secex), during the first 13 days of July, Brazil had already exported 6.1 million tons of soybeans and that could hit 9 million tons by the end of July.

According to the consulting firm Brandalizze Consulting, Brazil's soybean exports in 2020 could hit 83 million tons, which would get close to the record of 83.5 million tons set in 2018. It is the same for soybean meal and soybean oil exports as well which both could also test the record set two years ago.

While Brazil is exporting record amounts of soybeans, it is also importing soybeans as well due to tight domestic supplies in southern Brazil. Secex is reporting that thus far in July, Brazil has imported 66,000 tons of soybeans with 20,200 tons just in the last week. In all of July 2019, Brazil imported 12,700 tons of soybeans.

Domestic crushers are competing with exporters for available soybean supplies and the soybean stocks to use ratio in Brazil will probably be the lowest since the 2011/12 growing season. During the first semester of 2020, Brazil imported 272,000 tons of soybeans, which is up 197% compared to the same time in 2019.

Neighboring Paraguay is the primary source of Brazil's soybean imports. Most of Paraguay's soybean exports are barged down the Parana River to crushers and exporters in Argentina, but it is relatively easy to truck soybeans from eastern Paraguay across the dry border into the Brazilian state of Parana.

Soybean imports only account for 0.1% of Brazil's total imports and 3.9% of its agricultural imports. Brazil's largest agricultural import is wheat, which could total approximately 7 million tons in 2020.