Brazil: Weekly soybean sales showed no movement from China, which could lead to another adjustment in the US export scenario

Soybean physical prices closed the week quite slowly in terms of supply, with lower prices, mainly through ports. Now the agenda should begin to shift to Brazilian planting: some regions have already started work and are expected to pick up pace at the end of the month. Naturally, this should attract the attention of growers, who are currently well-positioned in the physical soybean market and holding back the remaining volumes, waiting for better price opportunities.

On the other hand, the current prices asked by sellers are well outside the industry’s range -considered expensive, leading industries to slow down purchases and even consider factory shutdowns. Last week was marked by little movement in premiums, which remain largely ineffective in determining prices, given the falling dollar. September’s shipment volume is very high (more than 7 mln tons), amid the US harvest and the arrival of physical soybeans into the market. Furthermore, there have been no consistent signs of Chinese purchases, a point that even led USDA to revise its US export expectations downward.

Brazilian export commitments accumulated through October already approach 98 mln tons – a very strong volume. Even so, premiums have not had any major change. The dollar continues to decline, testing the BRL 5.30 region, a move consolidated by the Fed’s decision to cut interest rates by 0.25%, while the Monetary Policy Committee (Copom) maintains the Selic rate at 15% a year. This differential increases the carry trade in favor of the real but at a high cost to domestic debt.

On the CBOT, prices retreated, trading near a support zone. The US harvest should gain pace from now on and, without further signs of Chinese purchases, US stocks are likely to gain momentum. The main focus will be October and November, months of peak buying seasonality and peak US exports. During these periods, it will be important to monitor Brazilian shipments, as a resumption of Chinese purchases in the United States could affect international export lineups and also impact Brazil.

Tags: export, planting, Brazil, prices, soybeans, US, purchases