Brazilian soybean meal export prices are gaining strength, distancing from Argentina amid supply uncertainties due to potential strikes in Argentina’s oilseed industry. The Brazilian market sees increased trading activity, bolstered by concerns over Argentina’s soybean processing capabilities. Projections show Brazil enhancing its leading role in soybean meal and oil exports in light of Argentina’s challenges.
As Argentina faces potential strikes among oilseed crushers and supply uncertainties, the Brazilian soybean meal market is gaining traction. Recent assessments show that Brazilian soybean meal, FOB Paranagua, is priced at $327.38/mt, whereas Argentina’s equivalent price is lower at $323.53/mt, indicating a growing distance between the two markets. The uncertainties surrounding Argentina’s processing capabilities are prompting traders to secure Brazilian supplies for imminent delivery.
The Argentine oilseed workers union, SOEA, announced plans for a national strike if Vicentin, a major soybean crushing company, does not meet salary obligations for February. With disruptions expected at soybean crushing plants, concerns regarding Argentina’s capacity to fulfill its traditional role as a leader in soybean meal and oil exports are escalating. SOEA emphasized the urgency of wage payments to avoid striking actions.
In contrast, Brazilian trading activity is robust, particularly in the paper market, as traders react to news from Argentina. The export premium for Brazilian soybean meal has tightened from a discount to a smaller premium, prompting increased business and ceasing competitive pricing at Argentina’s FOB Up River market. Traders speculate a potential meal shortage, leading to rearrangements in their positions.
Brazil, which is expected to experience favorable conditions, is forecasted to have completed 36% of its soybean harvest as of mid-February, improving its supply outlook. The Brazilian government recently decided not to raise biodiesel blending mandates, which will keep demand for soybean oil in check and could reduce soybean crushing activities, affecting meal production.
For 2025, Brazil is projected to crush 57.50 million metric tons of soybeans and export 23 million metric tons of soybean meal, compared to Argentina’s projections of 44 million metric tons crushed and 30 million metric tons exported. These trends indicate a shift in the soybean meal market, with Brazil potentially cementing its position amidst Argentina’s challenges.
In summary, increasing uncertainties in Argentina, driven by potential strikes and lower processing capacity, have led to a stronger Brazilian soybean meal market. With Brazilian prices rising and trade activity increasing, traders are adapting to these conditions. Forecasts for soybean production and export further highlight the shifting dynamics between Brazilian and Argentine markets, indicating Brazil’s potential to thrive amidst its neighbor’s difficulties.
Original Source: www.spglobal.com
