The soybean market has been showing variations, reflecting the climatic and economic conditions both internationally and in Brazil. Grão Direto recently released a detailed analysis of the behavior of the soybean market. soy, highlighting crucial points for producers and investors.
According to Grão Direto's analysis, the North American soybean harvest is developing satisfactorily. The latest USDA report indicates that 20% of soybean crops are in the flowering phase, with 3% already forming pods. This development is promising, indicating a robust harvest. The week was also marked by a significant increase in soybean oil prices, driven by speculation of greater demand for biodiesel production in the United States and by the rise in the Palm oil in Malaysia.
The dollar, after reaching its highest level in two and a half years (R$5.70), fell for a week due to promises to comply with the fiscal framework in Brazil. This drop brought relief to the markets. In Chicago, the soybean contract for July 2024 closed at U$11.89 per bushel, up 3.30%. In the Brazilian physical market, movements varied depending on the region, with a 2.33% drop in the dollar (R$5.49) influencing prices. The contract maturing in March 2025 also rose, closing at U$11.50 per bushel, up 2.31%.
Market outlook
An update on global supply and demand figures is expected next Friday (12), according to the USDA's monthly report. The forecast is optimistic regarding the North American harvest, with an estimated production of over 120 million tons. No changes are expected in Brazilian and Argentine production expectations. On the demand side, there may be slight adjustments, reflecting the low demand for North American soybeans.
Furthermore, in Brazil, soybean exports reached 15.4 million tons in June, a historic record for the month. From January to June, exports totaled 64.1 million tons, surpassing the same period last year. The devaluation of the real against the dollar boosted these exports, making Brazilian soybeans more competitive in the international market. However, this scenario may change in the coming months with the arrival of the corn harvest.
China, the largest buyer of Brazilian soybeans, is expected to import record volumes in July, driven by low prices and the possible return of Donald Trump to the US presidency, which could reignite trade tensions. As the US harvest approaches, international demand is expected to shift to the US crop, potentially strengthening Chicago prices and pushing up prices in the coming months.
Market attentive to weather forecasts
Despite the favorable weather conditions so far, the market is keeping an eye on the weather forecast. Scattered rainfall is expected in Illinois, Missouri, Kansas, Nebraska, and North and South Dakota. Although this scenario is not expected to have a significant impact in the short term, continued adverse weather conditions could result in market volatility.
Prices in Chicago have struggled to stay below $11 per bushel. However, there are no concrete fundamentals to justify a significant appreciation at the moment. In addition, the dollar should continue to seek lower levels, putting pressure on Brazilian prices.
Based on Grão Direto’s analysis, producers and investors should stay tuned to upcoming market updates and weather conditions to make informed and strategic decisions.
Source: Aline Merladete | agrolink