The week starts with a rise in soybean prices on the Chicago Stock Exchange. Commodity futures, around 6:45 am (Brasília time), rose between 3.50 and 4.50 points in trading this Monday (25). Thus, the January contract was quoted at US$ 9.00, while the May contract was quoted at US$ 9.29 per bushel.
The market recovers part of last week's lows, but remains on the defensive waiting for strong and consistent news. Prices are seeking to recover after hitting eight-week lows – last Friday (22) – and the trade war remains at the center of discussions, still bringing a lot of uncertainty to the progress of business.
The latest information indicates that an agreement between the two countries would be “very close”, according to American President Donald Trump, while negotiations still face thorny issues for both countries such as technology and intellectual property.
“US national security adviser Robert O'Brien said on Saturday that an initial trade deal with China was still possible by the end of the year, but warned that Washington would not turn a blind eye to what happens in Hong Kong ”, reported Reuters this Monday.
In parallel, traders are also following all the news linked to the conclusion of the new US grain harvest and waiting for the new weekly harvest monitoring bulletin that the USDA (United States Department of Agriculture) brings this Monday, after the market closes. . Last week, the soybean harvest was already completed in 91% of the area.
On the other hand, pay attention to the development of the season in South America, with the market following the planting of soybeans in Brazil, Argentina and Paraguay. Fieldwork is advanced in Brazil and weather conditions are beginning to regularize. Even so, some regions still suffer from a lack of rain or less rainfall, causing serious problems.
Those leading the field work are the states of Mato Grosso and Paraná, as traditionally happens, where more than 90% of oilseed sowing has been completed.
“Brazil’s 2019/20 harvest continues with a projected area of just over 37.4 million hectares compared to 36.4 million last year. The weather, little by little, is normalizing, keeping the harvest potential above 122 million tons compared to the 115.5 million harvested this year”, says Vlamir Brandalizze, market consultant at Brandalizze Consulting.
BUSINESS IN BRAZIL
The new week for business in Brazil, according to Brandalizze, begins with the focus of producers and negotiators focused on the dollar. The exchange rate, in recent days, has been one of the main legs of price formation here in the national market and should still be subject to a lot of volatility, therefore, a lot of attention.
Furthermore, some dispute between the domestic market and exports also contributes. From the new harvest, around 35% are already sold, while from the old harvest there is almost no more soybeans to be traded.
“The market must keep an eye on the dollar, which will continue to be the support factor for the indicators, with great chances of maintenance and even slight positive pressure for the grain that goes to domestic demand. After all, industries must come to the field to obtain supplies, but the ports will remain firm due to the trade war between the USA and China. The dispute between the Chinese and Americans should maintain a good presence of buyers in Brazilian ports and so, as we are at the peak of the off-season and there is little soy to be traded, there is a call for maintenance and even for some positive adjustments”, explains Brandalizze.
Source: Notícias Agrícolas
