Brazilian soybean export prices fell in mid-January 2024 due to weak Chinese demand, the start of the harvest season and other local factors, market sources told AgriCensus.
In the week before the January 15th report, prices for soy dropped more than 60 cents per bushel. Brazilian offers for February shipment were priced at a premium of 85-95 cents per bushel on reporting day, down from 140-145 cents per bushel on CME CFR China March futures the previous week. For other shipping windows, CFR China premiums also fell, but to a lesser extent.
Ranieri Pasinato Junior, from Zairam Agrocomm, highlights: soybean harvest in Brazil, lower Chinese demand and South American production impact falling prices.
Furthermore, possible logistical difficulties in Paranaguá and pressure from trading companies to sell soybeans in February also contributed to the reduction in prices.
The AgriCensus report highlighted that reduced Chinese demand was the main factor in the drop in prices with an annual increase in soybean imports from China last year but weak demand due to the country's loss-making pork industry.
As of January 5, 2024, China had 6.5 million tons of soybeans in stock. Furthermore, 7.5 million are expected to be imported in January, which, according to CNGOIC, will contribute to increasing stocks. This strategy is part of an ongoing effort to strengthen the country's reserves.
Source: Oils & Fats International
