Soybean sales from Brazil to China accelerate with foreign exchange and sea freight boost

Brazil's soybean sales recorded a strong pace this week, with China, the main buyer of Brazilian oilseeds, taking advantage of a favorable exchange rate and falling sea freight, which reduces costs, according to market officials. The business has advanced in Brazil, the largest global exporter of soybeans, although the harvest rate is slightly below that recorded in recent years, according to some analysts. "Overall, there was a bit of harvest delay, a lot of rain, but sales are at a strong pace this year. It came out from 1.5 million to 2 million tons this week," said Frederico Humberg, president of agribrasil grain dealer Frederico Humberg about the country's new business with China in the period. Other market players also registered strong deals with Brazilian soybeans this week. In a statement on Thursday, the consultancy T&F Agroeconomic said China's purchases totaled ten more shipments in three days a week. According to Humberg, of AgriBrasil, concerns about the economic impact of coronavirus have greatly reduced the value of sea freight, favoring chinese purchases. The Baltic freight index, a global benchmark, has accumulated weekly losses in a row, trading at the lowest levels since 2016. With regard to demand for Brazilian soybeans by China, the advent of the new coronavirus has not had an impact, according to agents consulted, differently from what was seen in other markets, such as oil. In addition, a stronger dollar against the real favors soybean importers, boosting demand for the Brazilian grain. On Friday, the U.S. currency was trading at more than 4.30 reais, hitting another record high. The AgriBrasil executive also said that as the harvest gains momentum, the country will become even more competitive against the United States, which tends to boost exports. "The United States is 15 cents (dollar per bushel) more expensive than Brazil (considering cost and freight), and increasingly getting more expensive, and Brazil more into the harvest...", commented on the country's main competitor in the grain market, which is in off-season. Brazil's soybean harvest of the 2019/20 harvest reached 15.7% of the total area of the country until This Friday, compared to 27.3% recorded in the same period of 2019, amid rains that hindered work in the fields, the consulting firm Arc Mercosur said on Friday, which also pointed out that the difference is small compared to the historical average for the period (16.2%). At the same time, the consultancy Safras & Mercado on Friday raised its soybean harvest forecast to a record 124.55 million tons, citing favorable weather in the Brazilian Midwest. Strong programming The schedule of ships to board soybeans in Brazilian ports is strong, with the maritime agency Cargonave pointing out just over 8 million tons this month, versus 7 million tons in the photograph of shipment schedules in the same period last year, when Brazil ended February with effective exports of just over 5 million tons. Strong programming The schedule of ships to board soybeans in Brazilian ports is strong, with the maritime agency Cargonave pointing out just over 8 million tons this month, versus 7 million tons in the photograph of shipment schedules in the same period last year, when Brazil ended February with effective exports of just over 5 million tons.