Brazil: Trading showed regular movements last week, despite lows in the soybean futures

Regular trading week for Brazilian soybeans, with sideways movements among price makers. The dollar and the Chicago Board of Trade operated in almost opposite directions, while domestic prices were adjusted by premiums, but without major movements.

In general, farmer selling is well-adjusted in Brazil. We have already traded more than 60% of the harvested soybeans, which accounts for more than 100 mln tons. Exports have accumulated record volumes in the first half of the year. With the arrival of corn approaching, concern is growing about freeing up space in warehouses.

Sellers have taken advantage of price highs, although prices, especially in terms of ports, are practically stable. In the interior, most of the indications operate above what is expected by parity, reducing the bargaining power of buyers in the face of more capitalized producers, who maintain high spreads in negotiations.

Soybeans operate in a range of 0.40 cents on the CBOT, but funds maintain a large net long position. In addition, movements with soyoil have had a strong influence due to the crush spread. In other words, despite the significant fluctuation, technically signs of a decline in prices are beginning to emerge. Funds are highly overbought, which could result in liquidation of positions.

In terms of fundamentals, the US planting is progressing rapidly, with a rainy climate that, for now, has not caused major concerns, although current levels raise an alert for the coming few months. There are still doubts about possible adjustments in the planted area.

Another open point is the volume of purchases by China of US soybeans, which could ultimately impact US stocks and, consequently, the market dynamics. Thus, the scenario remains unclear in terms of trends, while in Brazil, premiums indicate a more lateral behavior at high levels.

The Brazilian soybean market showed a few changes in domestic prices in May. Producers adopted a more cautious stance, taking advantage of peak moments to negotiate. With the harvest over in Brazil, attention is turning to planting and the initial crop development in the United States.

The 60-kilogram bag opened and closed in May at around BRL 128.00 in Passo Fundo (RS). In Cascavel (PR), prices fell from BRL 129.00 to BRL 128.00. In the Rondonópolis region (MT), they fell from BRL 116.00 to BRL 115.00. In the Port of Paranaguá, the bag remained stable at BRL 134.00.

On the Chicago Board of Trade, contracts maturing in July accumulated an appreciation of 0.55% in May, quoted in the morning of the 30th at USD 10.50-1/4 per bushel. Despite the negative fundamental scenario, prices remained firm over the month.

Tags: Brazil, prices, soybeans, US, trading, Market, soyoil, China, exports