Scenario shows slight improvement, prices rally, and soybean trading is scarce in Brazil

Soybean prices reacted last week in the country’s main trading regions. Business pace also improved, despite involving isolated operations and taking advantage of rebounds in Chicago and the dollar, which ended the week in positive territory. Premiums also remain firm and favor business.

The 60-kilogram bag rose from BRL 123.00 to BRL 126.00 in Passo Fundo (RS) last week. During the period, prices increased from BRL 121.00 to BRL 127.00 in Cascavel (PR); and in Rondonópolis (MT), from BRL 121.00 to BRL 125.00.

In the Port of Paranaguá, the bag reacted, rising from BRL 127.00 at the end of the previous week to BRL 132.00. Export premiums remain positive and firm, which helped sustain the FOB levels.

On the Chicago Board of Trade (CBOT), contracts maturing in November, the most traded, rose 1.67% over the week, quoted at USD 9.73 per bushel at the close on Friday (23). The market behavior was guided by a movement of technical purchases, with agents taking advantage of the recent decline – last week, contracts hit their lowest levels since 2020 – to rebuild portfolios.

Another factor that contributed to the high was the good export figures and sales announcements by the United States. With the price lows, the US product gained competitiveness.

But the fundamentals remain bearish. As the harvest approaches, the signs are that the US crop will break a record, reaching around 125 mln tons. Last week, the market closely followed the traditional Pro Farmer crop tour, with samples confirming above-average productivity in the main US growing states. Pro Farmer’s final number for the new US crop was 129 mln tons, above the 124.9 mln tons estimated by USDA.

The dollar also rose last week against the real, favoring soybean trading. The US currency had a weekly increase of 0.22% with the closing of Friday (23) at around BRL 5.48, but throughout the week the currency accumulated an appreciation of more than 2% at its best moment.

Despite the slight improvement last week, the scenario remains bearish for soybeans. Given this scenario, producers need to seek protection in the tools available to ensure the best trading, especially with regard to the new crop (2024/25). Producers should take advantage of opportunity windows such as this week to negotiate and reduce their exposure to the risk of lower prices at harvest.

Tags: Brazil, prices, United States, soybeans, purchases, crop, premiums