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Soybean prices in Chicago, after soaring on June 30th, due to the numbers released in the quarterly planting and stock reports, ended up falling during the rest of the week. The oilseed bushel reached US$ 15.62 for the first month quoted, on 07/03, closing Thursday (06) at US$ 15.25, against US$ 14.83 a week earlier.
In fact, the planting report was surprising when it reported that the area actually sown with soybeans in the USA was 5% smaller than the previous year, reaching 33.79 million hectares. Given this, the projected production of 122 million tons may not be realized, impacting an important speculative increase in Chicago. At the same time, the quarterly stock report, on June 1st, showed a volume of 21.7 million tons, falling short of what the market expected. This volume represents 18% less stock compared to the same date last year.
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In parallel, the quality of American crops, in position 02/07, fell a little further, leaving 50% between good and excellent, 35% regular and 15% between bad and very bad. At the same time, 24% of crops were in the flowering phase on that date, against 20% in the historical average, while 4% were in pod formation.
However, during the week there were interesting rains in the American producing region, with prospects for new rains in the coming days. This caused a decline in prices after the American holiday on 07/04. Even so, it is worth highlighting the fact that soybean oil reached 68.58 cents per pound, driven by an increase in global demand, as well as the increase in oil prices on the international market. This oil price was the highest since the end of November last year.
And here in Brazil, given this momentary recovery in Chicago, and an exchange rate that once again devalued the Real during the week (R$ 4.93 on 06/07), prices improved, even with premiums remaining negative at the ports, without significant evolution compared to the previous week.
Thus, the average in Rio Grande do Sul closed the week at R$ 131.62/bag, while the main state markets worked with R$ 130.50. In other Brazilian regions, the price of soybeans fluctuated between R$ 110.00 and R$ 124.00/bag.
Steady demand for soybean oil for biodiesel, both here and abroad, has helped lift soybean prices. At the same time, faced with the enormous drought suffered, Argentina, the world's largest exporter of soybean oil and meal, announced that it will export only 3.75 million tons of oil this year. This will be the lowest amount in the last 22 years. As a result, the search for soybean oil from the USA and Brazil should increase, a fact that also supported the grain's prices, remembering that the USDA is projecting a record domestic demand, in both countries, in 2022/23.
In other words, it opened a window of better prices for Brazilian soybeans, earlier than expected, however, without being unexpected as a certain improvement in national prices was expected for the second half of the year. However, for now, there was no recovery in prices.
awards the reason, a fact that allows us to warn that the opening of this window may be short-term. Everything will depend on the evolution of the weather in the USA in July and August. Once again, the strategy of achieving sales averages is fundamental.
It is important to highlight that, in the batch market, at the beginning of this week, the port of Rio Grande even tested R$ 150.00/bag. It would be the best price moment since last February. For Paranaguá, the gains are not so good. The lot market in the port of Paraná still feels greater supply pressure, with sellers more present. As a result, price references are almost R$ 5.00/bag below those observed in Rio Grande. (cf. Brandalizze Consulting)
On the other hand, Brazilian soybean exports in July are estimated at 9.4 million tons. If confirmed, it will be 2.4 million tons above that recorded in July 2022. Even so, the volume would be below the 13.9 million tons shipped in June, and the 14.37 million tons revised for May. Yes or no, from January to July, Brazil's soybean exports were estimated at 74.7 million tons. (cf. Cargonave).
In turn, according to Anec, shipments of soybean meal would be 2.25 million tons this month, that is, above the 2.07 million tons exported a year ago.
Source: Aline Merladete | agrolink
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