Soybeans drop on signs Brazil is gaining market share from U.S.

March 12, 2013

Luzi Ann Javier, Whitney McFerron – Bloomberg Businessweek, 03/12/2013

Soybeans fell in Chicago from the highest close in more than four weeks as the harvest speeds up in Brazil, expected to produce a record crop of the oilseed.

Brazilian farmers collected about 48 percent of the harvest as of March 8, against 46 percent a year earlier, researcher Safras & Mercado said in a report yesterday. Brazil, expected to overtake the U.S. as the world’s biggest exporter, may produce a record 83.5 million metric tons of soybeans, the U.S. Department of Agriculture said March 8. U.S. soybeans inspected for export in the week to March 7 slid 58 percent from a week earlier to 17 million bushels, the USDA said yesterday.

Slowing U.S. export inspections are “a sign that Brazilian beans may be starting to extract market share,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a report today.

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A strong voice for Brazil’s powerful farmers

January 8, 2013

Juan Forero – NPR, 01/07/2012

In some ways, Katia Abreu is still an old-fashioned farmer, one who rides her chestnut mare, Billy Jean, to tour her farm in Tocantins state in north-central Brazil.

She glides the horse along a gravel road, which soon turns to dirt, and along fields of sorghum and corn. She has plans for more.

“Soon, we’re going to produce fish and lamb,” she says. “There will be soybeans and fields of tall grass for cattle. Lots of cattle.”

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In Brazil, a landholder who speaks for agribusiness

December 17, 2012

Juan Forero – The Washington Post, 12/17/2012

A landholder and power broker in the country’s capital, Katia Abreu has heard all the warnings about ranches and soybean farms carving up Brazilian forests.

But as she rides a chestnut mare across fields of sorghum and corn — her 12,355-acre spread here in the soft hills of north-central Brazil — Abreu insists Brazilian farmers should be commended, not demonized. Big Agro has transformed this country into a breadbasket to the world, she said, one that’s poised to feed billions.

“We are not ashamed of anything,” Abreu said. “What’s important is that Brazil increase production.”

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Will Brazil import U.S. soybeans?

May 4, 2012

Agriculture.com, 05/04/2012

It’s been over a decade since Brazil, the world’s #2 soybean producer, has had to import the country’s “King” commodity from the United States. That streak could end as early as this year because of South America’s worsening crop shortages.

Due to a drought in the first months of the year, southern farmers in Brazil rushed to sell their soybean stock to China to compensate for their losses by taking advantage of excellent international prices.

Nearly 80% of the country’s soybean crop has already been exported this season, according to independent estimates. The percentage is 20% higher than the same month of 2011. The Brazilian government denies any type of “rationing,” but says that in the future – perhaps next year – the nation could import soybeans from other sources, including the U.S.

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Is Brazil a derivative of China?

August 24, 2011

Ricardo Geromel – Forbes, 08/24/2011

Brazil's first female President Dilma Rousseff with Chinese counterpart Hu Jintao.

In 2009, China overtook the US as Brazil’s largest trading partner. The United States had been Brazil’s main trading partner for about 80 years but a surge in Chinese demand for Brazilian agricultural and mineral commodities, such as soybeans and iron ore , dislodged the Americans.

Brazil is so dependent on China that some traders even describe Brazil as a “derivative” of China. Derivatives are contracts whose prices depend on the value of another asset. This expression shows to what extent the performance of Brazilian market is linked to China.

If the crisis in the United States and Europe hits China, Brazil will agonize. After the collapse of Lehman Brothers in 2008, Brazil has become more and more dependent on the Chinese giant. Brazil was one of the countries that suffered the less during the 2008 global crisis mainly because Chinese appetite supported high prices of agricultural and mineral commodities during global recession. In 2008, China absorbed 6.7% of Brazilian exports. In the first half of this year, the Asian giant represents 17%, as the demand from rich countries fell. In 2008, Vale, Brazil’s mining giant, sales of iron ore to China represented 28% of total; in the second quarter of this year, sales for Chinese represented 41.9% of the total.

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Factbox: Brazil: the world’s 21st Century breadbasket

June 22, 2011

Reese Ewing – Reuters, 06/21/2011

Brazil has for centuries been known as a leading producer and exporter of the world’s breakfast foods — orange juice, coffee, sugar and cocoa.

But over the past two and a half decades since the opening of the economy to foreign investment, Latin America’s largest economy has also become a leading producers of important grains and meats, through investments in technology and land.

Following is a list of most of Brazil’s main agricultural products and exports:

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