• Bloomberg reported that Nutrien Ltd, the world’s largest fertiliser manufacturer, is seeking to sell its retail operations in Argentina, Chile and Uruguay to focus on Brazil and other global markets. Nutrien is prioritising key markets to boost returns for investors. In its annual report, Nutrien said that Argentina’s currency controls meant losing money when the company transferred the currency out of the country at a more expensive exchange rate. Other companies have also abandoned Argentina in recent years including HSBC Holdings and Walmart.

• Reuters reported that a record soybean harvest in Brazil’s southernmost state would offset losses in the drought-hit centre-west, keeping a lid on prices and slowing the pace of sales. According to national crop agency Conab, Rio Grande do Sul will produce 68% more soybean this season compared to last season. Another state crop agency Emater, projects a record crop of 22.3mil tonnes, up 71.5% YoY. El Nino has hammered soybean farmers in Mato Grosso but compensated with strong yields in the south. Still, the rising supplies have met with soft demand, keeping many farmers out of the market so far.

• According to S&P Global, soybean oil spot port differentials in the Brazilian export market have touched a 20-month high amid tight supplies for overseas shipments, firm domestic demand and dropping Chicago Board of Trade futures. On 11 April, S&P assessed the FOB Paranagua basis for May-loading cargoes at minus 400 points to CBOT May contract. This was the highest level for a front-month shipment since 9 August 2022. Industry experts linked the bullish soybean oil cash port differentials mainly to the higher biodiesel mandate in Brazil. Since March, the mandatory mixture of biofuel in diesel has been 14% vs. 12% previously.

• According to Bloomberg, US Agriculture Secretary Tom Vilsack implied that China may be favouring Brazilian corn and soybeans partly in retaliation against recent restrictions on ownership of American farmland. Vilsack said his counterpart in China recently brought up Arkansas’ move to force seed company, Syngenta AG, which is controlled by China’s Sinochem Holdings, to sell 160 acres of farmland in the state. Vilsack said the US needs to diversify by working more with other countries in Asia, Africa and Latin America.

• Reuters quoted the National Oilseed Processors Association (NOPA) as saying that US soybean crushers processed more soybeans in March than any previous month although the daily crush pace slowed slightly from a record high in February. NOPA members, which account for 95% of soybeans crushed in the US, processed 196.4mil bushels of soybeans last month, up 5.5% from 186.2mil bushels in February and 5.7% from 185.8mil bushels in March 2023. The average daily crush rate, however, dipped to 6.3mil bushels, down from the record 6.4mil bushels a day in February. US soy processors have expanded crushing capacity and opened new plants to capitalise on rising demand for vegetable oils from renewable fuels producers, pushing crush rates in recent months to new highs.

Source: AmInvest Research - 22 Apr 2024