Based on projections from the USDA, the U.S. soybean export forecast for 2016/17 (Starting on September of each year and ending on August of the following year) is raised 1.4 million to a record 57.2 million tons due to the strength of exports to date and outstanding sales to be shipped later. As of the week ending in June 29th, accumulated exports had reached 52.9 million tons, 18 percent above this time last year, and exceeded total exports (including outstanding sales) in 2015/16. Outstanding sales of U.S. soybeans for the current marketing year are also strong at 6.8 million tons, slightly below the record level observed in 2015/16. While interest in U.S. soybeans remains strong, the market dynamics driving buyers to the United States are different to last year’s factors, as lower prices following Brazil’s record production have spurred additional global demand. Despite record post-harvest selling, Brazilian producers, facing these lower prices and a stronger real, have been more willing to store a larger percentage of this year’s crop in hopes that prices will rise. This has encouraged buyers to source additional product from the United States where supplies are ample and prices remain competitive. The recent price increase could temper the U.S. export forecast, as the increased prices could spur additional Brazilian sales and dampen global demand, resulting in a larger than usual quantity of reported outstanding sales being pushed into the 2017/18 marketing year.
Residents of villages along a key highway for grains exports in Brazil’s northern Para state continued to stage protests on Tuesday blocking the flow of goods like corn and soybeans to nearby ports. Local residents, merchants and farmers have protested on a federal since July 5 against a veto by President Michel Temer of legislation that would reduce the area under protection at a national forest in the region, Brazil’s federal highway police (PRF) said. Brazilian private ports association ATP on Wednesday said it was expecting 150 million reais ($47 million) worth of losses from protests in northern Para state. ATP said in a statement that the losses would be caused by a lack of grains for transport from the riverside city of Miritituba, where grains traders Cargill Inc and Bunge Ltd opened terminals in recent years. If disruptions persist, grain shipments at the port in Miritituba could ground to a complete halt by Friday and even if the blockades are called off and freight services resume at Miritituba, it would take several days to reorganize the flow of trucks and barges.
Earlier this week, in a presentation at the “8th China Iron and Steel Energy Conservation and Emission Reduction Forum 2017”, the director of China Metallurgical Industrial Planning and Research Institute (MPI), estimated that China’s steel reservoir, of which scrap could be generated from, will reach about 7.8 billion tonnes in 2017. He hypothesized that the country’s steel reservoir will reach 10 billion and 12 billion tonnes by the middle of China’s fourteenth and fifteenth “Five Year Plan” respectively. Additionally, MPI estimated that Chinese steel scrap generation will exceed 100Mt in 2017, and then could climb to over 200Mt by the end of the fourteenth “Five Year Plan”. According to the MPI, the way to achieve green and low-carbon development in China’s iron and steel industry is to strictly adhere to “one center” (sustainable development) and implement “three steps” which include; improving energy utilization efficiency, reducing greenhouse gas emissions and reducing pollutant emissions. China’s crude steel production is marking a rounding top. Stagnant steel production represents both challenge and opportunities. To maintain sustainable development, China’s steel industry is in urgent need of structural reform and products updating. Scrap steel, as an environmental-friendly recyclable metallic input and the only substitution for more polluting raw material – namely iron ore and coking coal – and is deemed to be encouraged by the government in steel production.