IARN — Demand for Brazilian soybeans remains high, despite civil unrest sparked by the government’s handling of the coronavirus pandemic. Ben Kasch, of Bower Trading, offers additional insight.
“They have some ballooning cases, and the president doesn’t seem to care much,” Kasch said. “He was quoted this weekend basically saying, ‘what do you want me to do about it’ on this coronavirus, so there’s a lot of concern. There could be some social unrest between the citizens and government, so things are ramping up. It’s not unheard of to have port strikes and that is something that could be pretty serious going forward here.”
Brazil has been “aggressively shipping” its largest commodity, with recent shipments exceeding previous records.
“Over the past three weeks, 12 million metric tons have been shipped out. Last year, during the whole month of May, they did 10 million metric tons. That’s getting back to the stockpiling programs that we’re seeing these countries be a little more aggressive in buying. Also, prices are really low. If you look at the past 10 years, these are some fo the cheapest prices we’ve seen here.”
Recent stockpiling efforts have also helped reduce United States supplies.
“We’ve seen great exports over the last week. China was in for one-point-one million metric tons; 700 old crop and 400 new crop. We’re also seeing the dollar stabilize and set back a little. It’s been pretty lofty compared to other currencies out there, so that currency valuation does come into play,” Kasch said.
Similar to the United States, Brazilian exporters have reported increased sales to China. Data compiled by Bloomberg indicates China bought over 10 cargoes of Brazilian soybeans this week, which could further impact already rocky relations between the U.S. and China.
