According to StoneX, the quotes of soy on the Chicago Stock Exchange recorded a significant increase last week. This movement was mainly driven by the covering of short positions by speculative funds and adverse weather conditions in South America. Despite the global supply and demand scenario indicating a greater balance, the November contract closed on Friday (27) at 1065.75 cents per bushel, representing an increase of 5.3% over the week.
Although the weather continues to be a relevant factor for the market, it is still premature to say that delays in soybean planting in Brazil will negatively impact productivity or the planted area.
Weather conditions in South America
With the focus on South America, the expectation is that planting will progress more quickly as weather conditions improve. However, there is a risk of a concentration of planting activities, which could increase risks to the harvest and delay the oilseed cycle, affecting the second harvest. To date, Brazilian producers have planted only 1.5% of the area destined for soybeans, with Paraná advancing 11% and Mato Grosso 0.3%.
China's economic stimulus and market impacts
Another factor that boosted the market was the announcement of the largest stimulus package for the Chinese economy since the beginning of the pandemic. Investors welcomed this measure, which generated greater optimism in the market. Meanwhile, the harvest in the United States is progressing, with 13% of the area harvested. This, according to the most recent USDA report, exceeds the average of 8% for the same period.
Source: Leonardo Gottems | agrolink
