The onset of 2024 has ushered in a downward trend for dry bulk owners. Historically, the initial two months of each year typically exhibit a subdued freight market performance. Presently, a multitude of factors are influencing the diminished demand for tonnage. Our analysis will concentrate on Brazil, the leading exporter of corn and soybeans during 2022/2023 MY.
During the 2022/2023 marketing year, Brazil recorded unprecedented volumes of soybean and corn exports, fueled by robust demand from China, ample supply, competitive pricing, and a vigorous export pace. The latest World Agricultural Supply and Demand Estimates (WASDE) report estimates that for the current marketing year, Brazil's corn and soybean exports will reach 57.0 million and 95.51 million tons, respectively. For the 2023/2024 marketing year, the WASDE report projects Brazilian corn and soybean exports to be approximately 54.0 million and 99.5 million tons, respectively. However, adopting a more cautious perspective, it is important to note that corn production and, consequently, export volumes may be adversely affected by the delayed soybean planting, attributed to El Niño-related weather disturbances since October. This delay might extend the soybean harvest period until March, potentially constricting the planting window for Safrinha, Brazil's largest corn crop, which could negatively impact its total yield. On a positive note, favorable hot and dry weather conditions have enabled some farmers to accelerate their soybean harvest, partially mitigating these concerns. Despite this, there is an indication that the United States may regain its position as the foremost corn exporter this year, following its previous displacement.
In reference to January 2024, the latest data from ANEC highlights a significant decrease in Brazilian corn and soybean exports compared to the previous month, with reductions of 42.2% and 65.7%, respectively. In contrast, there is an anticipated modest rise in soybean meal exports, which are expected to increase to 2.2 million tons from 1.99 million tons in December. Nevertheless, when examining year-over-year figures, January 2024's export numbers fall short of those recorded in January 2023. Specifically, soybean and soybean meal exports in January 2024 are forecasted to witness an increment of approximately 950 thousand tons. In contrast, corn exports are projected to diminish by 1.13 million tons year -over-year, amounting to a total of 3.72 million ton. The month-overmonth downturn in coarse grain trade has also impacted congestion levels, particularly at the Port of Santos. Notably, this port experienced nearly 100 congested vessels during October-November 2023. However, as of the current date, this figure has significantly decreased to 38 vessels, evidently influencing the performance of the freight market.