Soybean prices have "significant" further downward potential as South American crops enter the market in coming weeks, Oil World said.
Brazil is estimated to export 2.5 million metric tons of soybeans in February, bringing total shipments in the first two months of 2014 to a record 2.8 million tons, the Hamburg-based researcher wrote in an e-mailed report. Soybeans fell 2.6 percent in Chicago in the last two weeks of January. Prices "only hesitatingly" reflect South American harvest pressure due to tight U.S. supplies, according to Oil World.
"Brazilian soybeans are now increasingly setting the tone in the world market," Oil World wrote. "They have recently widened their price discount vis-a-vis U.S. origin, based on the advancing harvest and expectations of a rapid start of the ambitious Brazilian soybean export program in February."
Brazil, the world’s top exporter, shipped 960,000 tons of soybeans in February of last year and 1.57 million tons in February 2012, according to Oil World. Longer working hours implemented at Brazilian ports last year will allow for "significant growth" in expected shipments in February and a further acceleration in March and April, Oil World said.
Rainfall has slowed soybean harvest progress in Brazil’s Mato Grosso, the top producing state, with crops collected on 5.8 percent of soybean area as of Jan. 23, compared with 7.1 percent a year earlier. That limited the harvested crop to 1.5 million tons from 1.6 million tons at the same time in 2013.
Oil World said it’s keeping a forecast for Brazil soybean production at 89.5 million, even as "a growing number of estimates" pegs this year’s crop at more than 90 million tons.