Negotiations of the soybean complex in the Brazilian market are on the rise, according to the latest newsletter from the Center for Advanced Studies in Applied Economics (Cepea). Currently, the combination of robust domestic and international demand, combined with the appreciation of the dollar against the real, has boosted prices in the national spot market, with soybean oil standing out for reaching, in June, the highest average of the year in real terms.
Cepea researchers attribute the scenario to competition between industrial consumers and increased international demand. As a consequence, premiums export of soybean oil in Brazil returned to the levels observed in June 2022.
Furthermore, on the supply side, the National Supply Company (Conab) projects national soybean production of 147.35 million tons, which represents a drop of 4.7% compared to last season. Exports are also expected to decrease, with estimates pointing to 92.43 million tons, a reduction of 9.3% compared to the previous period.
The global and local impact on Brazil’s soybean sector
Global and local economic factors influence the dynamics of the soybean market in Brazil, affecting prices and supply. The appreciation of the dollar, in particular, has a significant impact, making Brazilian products more competitive on the international market, but also increasing internal costs for producers and consumers.
Furthermore, the growing demand for soybean oil, especially for industrial and biofuel uses, highlights the versatility and importance of this product in the market. The return to 2022 export premium levels indicates a recovery and strengthening of Brazil as a key soybean exporter.
Conab predicts lower harvests and exports, adjusting the supply-demand balance and possibly influencing future prices. Climatic conditions and trade policies will also be determining factors for the future of the soybean market in Brazil.
Source: Aline Merladete | agrolink
