The soybean harvest in Brazil fell short of analysts’ expectations and will likely translate into an upsurge in demand for US stock and a hike in global prices. Brazil was anticipated a record harvest but lower yields and harvest delays due to adverse weather caught traders and end users by surprise. More than 110 ships have been chartered on a preliminary basis to load crops in the Pacific Northwest. Chicago future prices have shot up by 30% since early November to an eight-month high with the premium for July contracts over November rising eight-fold.

US sales of exports jumped to 2 MMT last week, far over analyst expectations. The higher cost of soybeans are set to impact the broader supply chain at a time when global prices of food are at near record highs. Feed costs for animals are set to rise as well as prices for cooking oil, already boosted by record palm and canola oil prices.

China typically looks to South America for supplies in Q1 as harvesting begins in early January. Until a few months ago, a bumper harvest was set for the continent with 145 MMT coming from Brazil, 50 MMT from Argentina and 10 MMT from Paraguay. Now experts forecast a drop in total exports of about 20 MMT ahead of La Nina which has brought unusually high temperatures and droughts to key growing regions.