The soybean harvest in Brazil is in full swing; estimates are that over 50% of their sizable crop has been harvested. Jim Bower, with Bower Trading, says his sources in Brazil tell him, however, that moving the beans to export is a logistical nightmare, “On some of the roads leading from the fields to the ports there are truck traffic jams that are 40 miles long.” Bower said he has also been told that, at the ports, lines of trucks stretch 8 miles waiting to unload. He added that Brazil does not have the infrastructure to move such a large crop to market.
Most of the soybeans from Brazil were going to China, but Bower says the Chinese have canceled some of their South American purchase, “They were concerned about being able to get enough product out of South American, so they booked extra loads. Now that shipments are beginning to flow, they have canceled some orders.” Bower explains this is standard procedure for China.
What kind of impact will this have on our soybean market? Bower says, despite Brazil’s big crop, the market is still worried about this year’s US soybean crop, “I think the market is convinced the US can have a big crop, but I think it is premature to get to negative on prices for the new crop yet.” He said that it depends on how supply and demand for the old crop plays out this summer and that Mother Nature still holds the wild card on the weather.
The complete interview with Jim Bower can be found in the audio section of the Hoosier Ag Today Smartphone app.