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Once again, the behavior of soybean oil prices supports grain prices on the Chicago Stock Exchange. Around 1:20 pm (Brasília time), derivative futures rose more than 2% among the most traded positions - with the first being quoted at 49.02 cents per pound - giving way to increases of more than 1.5% among the grain prices in the trading session this Friday (2).
“Oil is up more than 2.5%, supporting the rally in soybean oil and helping to support grain prices,” says the Agrinvest Commodities team. Both WTI and Brent rose by more than 2% this afternoon, reaching respectively US$ 71.69 and US$ 76.02 per barrel, with the market very anxious for the new OPEC (Organization of Oil Producing and Exporting Countries) meeting. Petroleum) which takes place this weekend.
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As the senior vice president of BOK Financial Securities, Dennis Kissler, explained to the international news agency Bloomberg, “the support for oil prices this Friday comes from expectations about what OPEC could do at the new meeting. It appears that traders in this market are shifting into a “risk appetite” mode as, for now, fears of a recession have subsided.”
There are also prospects in the market that the organization could, however, maintain its production levels, as they would already be at considerably low levels, as analysts also explained to Bloomberg.
“Oil prices are likely to fall a little further early next week because OPEC+ may not decide on further production cuts. In any case, we see the current level of production to be very low in the medium term, so the oil price is likely to rise again, subsequently, in the coming weeks,” analysts at Commerzbank AG said in a report this Friday.
And all this movement has been important for the evolution of soybean prices in Chicago. “The energy market is one of the medium and long-term support factors for CBOT soybeans. Domestic demand in the USA is expected to grow strongly in the coming months, with the start-up of several renewable biodiesel plants. Even if the American harvest is full, American soybean oil stocks should be very low at the end of the 2023/24 season”, adds Agrinvest.
The market will end this week dividing its attention between the latest news on the financial market, as well as fundamentals, especially the climate in the United States. And this is, at this moment, the main vector guiding prices, since crops are moving towards important stages of development.
“This week's Drought Monitor showed a worsening of the drought in most of the Midwest, effectively reviving market fears, especially ahead of the weekend and also next Friday's Supply & Demand report (09), as climate forecasts indicate dry weather in the short term, with the GFS and European models diverging in their indications about the return of rain in June”, explains the general director of Grupo Labhoro, Ginaldo Sousa.
Source: Carla Mendes | Notícias Agrícolas
