Soybean Third-Quarter Exports Seen at Risk of Drop by Oil World

World soybean exports are at risk of falling in the third quarter as farmers in Argentina may hang on to beans amid dissatisfaction about export taxes and exchange rates, Oil World wrote.

The estimate for shipments in the July-September period may have to be cut by 500,000 to 1 million metric tons, the Hamburg-based oilseed researcher wrote in an e-mailed report today. Oil World has forecast global exports of the oilseed will climb to 20.9 million tons in the three months compared with 20.6 million tons a year earlier.

Farmers in Argentina have protested a 32 percent export tax on soybeans as well as an “unrealistically low” official exchange rate for the peso in recent weeks, according to Oil World. June shipments from the country of 1.1 million tons were less than expected, and indications for July were “not encouraging either,” it said.

“There is a risk that world exports of soybeans will decline from a year earlier in July-September,” Oil World wrote. “The major swing factor is Argentina, as shipments in June fell short of expectations.”

Oil World forecasts Argentina’s soybean exports will jump to 4.5 million tons in the third quarter from 2.9 million tons in the year-earlier period, and said that number may be cut.

“Subdued farmer selling and low shipments to the ports are currently still keeping Argentine soybean exports at a relatively low level,” Oil World said. “There is a high risk that actual exports in the July-September quarter will be lower than we are currently assuming.”

Inflation Hedge

Farmers in the country have generally limited sales to cash-flow requirements, keeping a “much-larger-than-usual” quantity of the oilseed unsold as a hedge against inflation, according to the researcher.

Brazil is predicted to ship 11.5 million tons of beans in the July-September period up from 8.2 million tons a year earlier, while U.S. soybean exports are seen at 2.4 million tons compared with 6.7 million tons in 2012.

The U.S. outlook is based on “very low” shipments of a combined 900,000 tons in July and August, before a pickup in exports in September of 1.45 million tons, Oil World wrote. The September number is “questionable” due to later than usual harvesting in the U.S., the researcher said.

“The prospective delay in soybean harvesting this year as well as infrastructure limitations in the U.S. could create a difficult situation, particularly if China becomes a strong buyer of U.S. soybeans for early shipment,” Oil World said.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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