Brazilian soyabean export prices dropped in mid-January due to weak Chinese demand, the start of the harvest season and other local factors, market sources told AgriCensus.

Soyabean prices dropped more than 60c/bushel (bu) in the week before the 15 January report.

Trade sources reported offers of Brazilian cargoes for February shipment were at a premium of 85-95 c/bu on the day of the report and at 85 c/bu the previous Friday, compared with 140-145 c/bu over March CME futures CFR China the previous week.

For other shipment windows, CFR China premiums for Brazil also dropped – although to a lesser degree – with offers for March reported at a 55-60 c/bu premium over March futures on the day of the report, compared with 80-90 c/bu the previous week, while prices for other months also fell between 8 c/bu and 23 c/bu during the period.

As in previous years, the start of the soyabean harvest was a major factor driving prices lower in Brazil as Chinese buyers would be aware that storage capacity in producing countries would be under pressure, according to Ranieri Pasinato Junior, a market analyst for Zairam Agrocomm Brokerage.

“But this time, some other elements are also at play, including South America's huge soyabean production, smaller Chinese demand amid poor crush margins and sufficient soyabean stocks, and more competitive pricing of Argentinian soyabeans,” Pasinato Junior was quoted as saying.

A substantial production forecast in Brazil – despite recent downgrades by analysts – was a further factor, AgriCensus wrote.

Meanwhile, potential logistical difficulties in Paranaguá – where a large volume of old crop awaited shipment – could also have pushed prices down, according to Brazil-based sources.

In addition, trading houses were thought to have bought a lot of soyabeans for the period that they now needed to sell to China in February, but the window for doing this was small, putting further pressure on prices, Eduardo Vanin, lead soyabean analyst and brokerage and consultancy Agrinvest, was quoted as saying.

The consensus among brokers in Argentina and China contacted by AgriCensus was that reduced Chinese demand was the main factor for the drop in prices and the outlook was uncertain.

Although there had been a year-on-year increase in China’s annual soyabean imports last year – the first increase since 2020 – the country’s loss-making pig industry had led to weak soyabean meal demand and prices, which had in turn held back demand, the report said.

Against this backdrop, as of 5 January China had around 6.5M tonnes of soyabean stocks, a 6.2% increase from the previous week and a 19% and 46% increase from the previous month and previous year respectively, AgriCensus wrote.

Soyabean imports in January were expected to total 7.5M tonnes, which could continue to push up soyabean stock levels, according to Chinas National Grain and Oils Information Center (CNGOIC).