The prices of soy in Chicago depreciated by 3.7% in June, averaging USD 11.73 per bushel. In contrast, prices in Paranaguá recorded their fourth consecutive monthly increase. The depreciation of the real and positive premiums in the Brazilian market contributed to the formation of favorable prices, resulting in a significant advance in soybean trading in Brazil.
According to information released in the Itaú BBA report, by the beginning of June, 65% of the 2023/24 harvest had been sold in Brazil, compared to the average of 70% over the last five years. With an estimated production of 153 million tons, this means that approximately 99 million tons have been sold, with just over 54 million tons still to be sold.
In Argentina, sales are delayed due to exchange rate issues, with 26.7 million tons of the 50 million tons produced in the 2023/24 harvest still unsold. The difference between the official dollar and the informal dollar has held back soybean sales in the country.
Impact of weather conditions and fund decisions on global prices
On a global scale, the positive progress of American planting and favorable weather conditions put pressure on soybean prices on the CBOT. In addition, funds increased their short positions, intensifying the downward pressure on prices.
U.S. soybean stocks reached 26.4 million tons in the second quarter, exceeding market expectations. Consequently, they projected planted area at 34.9 million hectares, slightly below expectations. Therefore, the weather in the coming months will be crucial to confirm these estimates.
China accelerates purchases, increasing stocks
Chinese processors stepped up soybean purchases between April and June. In addition, volumes exceeded 34 million tons, raising stocks at Chinese ports to around 7 million tons. This is the highest level since July 2023.
Soybean derivatives: price and consumption trends
Soybean derivative prices fell on the international market, with meal showing a slight drop on the Brazilian domestic market. However, soybean oil appreciated for the third consecutive month, reaching R$4,374 per ton in Mato Grosso.
Furthermore, in the US, there was an increase in the consumption of raw materials for biofuels, with soybean oil recording the best performance since December 2023. Biofuel production consumed 486 thousand tons of soybean oil, representing 35.4% of the total inputs used.
Palm oil market and its implications
The production of Palm oil in Malaysia is being closely watched by the market. Recently, the Indian government announced a new rule that will allow the import of 150,000 tons of palm oil and Sunflower oil with a reduced tariff to control inflation, amid firm demand for food.
An Indian delegation’s visit to Brazil highlighted concerns about the supply of vegetable oils to meet India’s growing demand. India currently consumes 25 million tonnes of vegetable oils, with imports accounting for 59% of this total.
Source: Aline Merladete | agrolink
