The soybean market continues to work with stability on the Chicago Stock Exchange, having already tested both sides of the table in this Tuesday's trading session (24). Around 11:20 am (Brasília time), prices rose just over 1 point, taking November to US$ 12.88 and May to US$ 13.33 per bushel. Derivatives continue to retreat, with the declines being led by oil, which has already lost more than 1%.
Waiting for new news, the market continues to move quite sideways, without very intense fluctuations. Despite this, according to analyst and director of Royal Rural, Ronaldo Fernandes, “the useful life for soybeans above US$ 13 (in the closest contracts) has been very short”.
In focus, the American harvest remains – which already exceeds 70%, according to the latest figures from the USDA (United States Department of Agriculture) – and planting in Brazil, which is gaining more and more space in the view of market agents.
Climate uncertainties and market trends
“32% is the number of the planted area in Brazil. On a national level, if we compare it to the average, this number is not far behind. But, if we isolate some regions and compare them with last year's number, then we can talk about a delay. So, when we isolate some regions, we see some irregularities and some delay. In the general picture, we still cannot talk about delays. And that’s how foreigners see it”, explains Fernandes.
Therefore, the effects of the problems that are felt by Brazilian producers due to climatic adversities are not yet felt in the progress of oilseed prices on the CBOT. And now, all eyes are on the weather forecast and whether they will be confirmed as shown in the latest updates.
“We have rain expected from the 25th to the 27th, then it stops. And the widespread rains return from October 31st to November 8th. It is marked on the maps and we need to see if these rains will actually be confirmed. The other point on the radar is high temperatures”, explains Fernandes. “So, Brazilian production is not defined at all, neither in volume nor in price. The market is unable to create a trend because it still cannot know what volume Brazil will be able to produce. And it’s important to make this clear now”, he adds.
And the executive explains further by saying that this difficulty in defining trends involves the moment that is divided between “we don't have a good window and good weather for now and we also aren't in the worst of all worlds. We have both scenarios, it could break, as it could be a good production. And the maps are showing this. So, the market chose to sit and wait”, says the director of Royal.
Soybean market trends in 2023/24: Brazil and Argentina in the spotlight
The market is gradually paying more attention to Brazil's new harvest, while it will also soon begin to monitor Argentina's 2023/24 harvest more closely. Planting there has not yet started – as traditionally happens – and speculation now indicates the possibility of a migration of part of the soybean area to corn, which could also affect the market. Therefore, as Fernandes adds, whether due to the climate or the price, the future of Argentine soybean farming will be decisive in defining the path of oilseed prices.
Still in Argentina, political determination is also in evidence, with the second round of presidential elections taking place in just under a month, between Sérgio Massa and Javier Milei, and the outcome of the dispute will have a major impact on the country's agribusiness, in particular due to the guarantee or not of its competitiveness in the international market.
“So, to define the soybean trend, we have, firstly, Brazil; According to Argentina, Latin America will set the trend for soybeans. And there is demand too, but the Chinese will go through fits and starts, 100 million tons they need to buy and that is right, priced. What will define the price of soybeans in 2024, more than demand, is knowing what will come from supply. That's the doubt. Because demand will vary, but it is priced and consolidated”, summarizes Ronaldo Fernandes.
Thus, the threats that still accrue to the new offer have not been priced, with room for increases, “but they are not defined”. Brazil and Argentina are the ones who will lead the trend.
Source: Carla Mendes | Notícias Agrícolas
