Seasonal Trade Flow Shift: Brazil to EU

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ClipperData would like to alert market participants to the seasonal shift underway from US-origin soybeans to Brazilian-origin soybeans for unloading in the European Union. The United States has been the dominant supplier of soybeans to the European Union since August 2018, but with the Brazilian soybean harvest north of 70 percent and Chinese soybean imports lower year-over-year, odds are high that Brazilian loadings into the EU market accelerate at the expense of the US going forward, despite a wide differential in freight rates. 

bzl us eu soy trade flow

  • Q1 2019’s US dry bulk soybean loading to the EU was less than half the 1.36 million tonnes per month seen in Q4 2018.  
  • Brazilian loading to the EU averaged 620,000 tonnes per month in Q1 of 2019, exceeding 1 million tonnes in March 2019 – for the first month since last May.
  • Average loading to the EU from Brazil in Q2 of 2018 was just shy of a million tonnes per month.  

nw eu offtake soy  

  • The US enjoys an estimated $15/ton freight advantage to the EU vs. Brazil, but clearly there are shifts in this trade pattern that should last through the second quarter. 

soy unload variance by quarter