Brazil soybean crush margin up 51.5% so far in 2022
Flour and oil outings to renew records in 2022-23
Brazil is on track to produce record volumes of soybean meal and oil in the 2021-22 marketing year (October-September), possibly surpassing those marks in the next season in a context of still attractive grinding margins for local processors.
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In its latest report on global agricultural supply and demand estimates, released July 12, the US Department of Agriculture pegged Brazil’s 2021-22 soybean meal and oil production at all-time highs of 38.17 million tonnes and 9.48 million tonnes, respectively.
Overseas meal shipments are also expected to reach a record 18.50 million tonnes, while oil exports reached 2.05 million tonnes, the highest volume since 2007-08 under a lower-than-expected biodiesel mandate for 2022 – soybean oil is the main feedstock for Brazil’s biodiesel industry, so a reduction in blending has resulted in a surplus of vegetable oil to eventually be sent to the ‘foreign.
This performance for soybean by-products follows a steady local crush, estimated by the USDA at a record 49.25 million tonnes for 2021-22, up 5.5% year-on-year. as local processor margins in 2022 were higher than observed. in 2021.
The Brazilian soybean crush margin on July 13 was $27.51/mt, 18% higher than the same date in 2021, according to Platts data from S&P Global Commodity Insights. The average since the beginning of the year for this margin was $66.81/mt, or 51.5% above the average calculated for the same period last year.
The highest level so far in 2022 – and for the entire Platts series – was valued on March 8 at $124.96/mt, following the sharp rise in soybean oil prices on the international market due to the consequences of the Russian-Ukrainian conflict. No crush margin above $100/ton was seen in 2021, again according to data from S&P Global Commodity Insights.
Higher 2022-23 volumes
According to the USDA, Brazil is expected to increase its production of soybean meal and oil to record highs in marketing year 2022-23, reaching 38.35 million tons and 9.53 million tons, respectively. , as crushing was expected to increase by 0.5% to 49.50 million tonnes. — although higher volume can be achieved.
“I expect the crush could reach 50 million tonnes in Brazil if the harvest is around 150 million tonnes,” said Peter Meyer, head of grains and oilseeds analysis at S&P Global Commodity. Insights. “It would be a record, and therefore the productions of oil and flour would also be records.”
For now, the USDA still sees Brazil harvesting a record 149 million tonnes of soybeans in 2022-23, 18.3% more than the drought-hit 2021-22 season.
Brazil is the world’s third-largest producer of soybean meal and oil, and the second-largest in terms of exports of these two products, behind Argentina.