Improved Brazilian crop yields may not outweigh relentless global demand for corn and soybeans
Brazil’s soybean harvest is still expected to exceed the nation’s 2020 crop, but the increase may not be enough to counterbalance ongoing demand and rising prices for corn and soybeans, according to the U.S. Department of Agriculture (USDA).
However, demand has also continued to rise, according to USDA, with cumulative U.S. exports of soybeans now sitting at a record 47.5 million tons. China alone accounts for 32.4 million tons of soybeans purchased from the U.S., and the continued breakneck pace of China’s imports prompted USDA to increase the total imports expected by China this season by another 500,000 tons.
Imports by some nations have begun to decline in the face of high prices, but overall growth in demand continues to outstrip growth in supply, cutting into global soybean stocks and triggering an eighth consecutive month of price increases.
Export prices for U.S. soybeans increased US$55 per ton in January, USDA reported, while Brazilian export prices grew by US$44 per ton. The USDA’s projected on-farm average price for soybeans sits at US$11.15.
Corn prices, meanwhile, rose even faster over the course of January than soybeans, with the USDA now putting the on-farm value of U.S corn at US$4.30, a ten-cent increase over last month.
While soybean futures have yet to return to a January 14 peak of US$14.31 per bushel, corn prices have continue to rise and as of February 9 sit at US$5.64 per bushel. According to the USDA, the high price of corn has begun to spill over into other grains as animal producers around the globe turn to food-grade grains for feed, with China turning to auctioning off state rice reserves as animal feed.
China’s corn imports are expected to continue throughout 2021, and USDA increased expected 2020-21 season imports by China by another 6.5 million tons, bringing this season’s anticipated total purchases by China to 24 million tons.