Brazil to benefit the most from Argentina's soybean crop losses: Safras & Mercado

22 Mar 2023 | Marcela Caetano

Brazil will benefit the most from Argentina’s soybean crop loss, by increasing its crushing and soymeal and oil shipments to cover for the neighboring country’s lower output this season, according to Safras & Mercado.

The Brazilian-based consultancy currently projects Argentina’s soybean crop at 31.4 million mt but its next forecast should land below that level.

“Market players are talking about 25 million mt output so our next update must come in under 30 million mt,” analyst Luiz Fernando Roque said in an online event Wednesday.

That could lead Argentina's soybean imports to reach 10 million mt for the first time in 2023, up from the previous year's 3.7 million mt.

Argentina’s exports, on the other hand, are expected to be limited to 1 million mt, 83% down year-over-year, while the average per year is around 5-6 million mt. In 2022, Argentina shipped 5.8 million mt.

Soybean crushing in Argentina is expected to reach 34.5 million mt, down 9% from last year's 38.1 million mt. 

Brazil’s scenario is quite the opposite which makes the country more than able to fulfill the gaps left by Argentina in the global market until US crop hits the market later in 2023.

The country is projected to harvest 152.4 million mt, a 18% increase on the year, according to the consultancy, while exports are projected at record 94 million mt in 2023, versus 78 million mt last year.

Brazil’s crushing is projected at 53 million mt, above last year’s 50 million mt.

Soymeal production was pegged at 40.8 million mt, up 6% on the year, while exports are expected to reach 22 million mt, an 8% increase on the year.   

Brazil’s soyoil, on the other hand, won’t benefit as much due to higher domestic demand after the country’s biodiesel mandate was increased to 12%.

Safras expects 4.9 million mt of soyoil to be used for biodiesel production, up 16% on the year, while domestic demand is forecast at 9 million mt, a 18% yearly advance.  

While production is projected at 10.8 million mt, a 6 year-over-year increase, exports are projected to reach 2 million mt, down 23% from last year’s.