Soybean crushers in Brazil are running low on soybeans as they face tougher competition from Chinese buyers over the remaining 2017-2018 season supplies.
A Bloomberg report says crushers in Brazil worked with negative margins since the second half of September. The pace of processing has slowed since the soy rally has doubled premiums this year, putting a squeeze on domestic producers. Other plants have halted all activities and say they won’t start up again until the upcoming harvest starts in the first quarter of 2019.
One industry analyst says soybean product inventories are running low, with some plants announcing they no longer have soy oil to sell. The industry group representing soybean processors says crushing margins are getting pressure from higher soybean prices. However, it didn’t really slow the pace of processing until August of this year.
Brazil soybean stocks are expected to fall by 1.5 million tons to their lowest-level since 1999. September exports totaled 4.6 million tons, with 91 percent heading to China.
Source: National Association of Farm Broadcasting News Service.