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The report on planted area and quarterly soybean stocks, released on Wednesday by the United States Department of Agriculture (USDA), boosted futures contracts in Chicago, a movement followed in the domestic market. The internal movement also gained pace.
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The week's increase reduced the losses accumulated throughout the month of June in the Brazilian market. With a lot of volatility in Chicago and the retreat of the dollar, last month was marked by a slow pace in negotiations.
A 60-kilo bag at the Port of Paranaguá rose from R$ 151.00 to R$ 165.00 between June 25th and July 1st. But at the beginning of the month, the price was R$ 173.00. In Rio Grande, the behavior was similar, with the bag starting June at R$ 173. This week, the price partially recovered, going from R$ 148.00 to R$ 164.00.
On the Chicago Mercantile Exchange (CBOT), the contract for delivery in November, the most traded, rose 9.9% in the week, closing yesterday at US$ 13.95 ½. In the month, the position rose 1.91% and in the semester, the increase was 25.8%.
Chicago's good performance in the month was defined by this week's performance, mainly with the jump given after the release of USDA numbers, which indicated area and stocks below expectations. The month had a behavior of ups and downs, typical of the weather market period. In addition to climate projections, the flow of money from funds, doubts about the use of biofuels and concerns about the Chinese strategy to combat the rise in commodities deserved attention and had a strong impact on prices.
According to the USDA, the area planted with soybeans in the United States in 2021 is expected to total 87.6 million acres. If confirmed, the area will be 5% above the total cultivated last year.
The number was below market expectations, which were 89.15 million acres. The number repeats the estimate from the planting intention report, released in March by the USDA. Compared to last year, the area should be equal or greater in 28 of the 29 producing states in the country.
Quarterly US soybean stocks, as of June 1, totaled 767 million bushels. The volume stored fell by 44% compared to the same period in 2020. The number was below market expectations, of 795 million bushels.
The exchange rate was also highlighted for the composition of internal prices this month of June. Last month, the American currency fell from R$ 5.223 to R$ 4.972, accumulating a loss of 4.8%. In the semester, the American currency lost 9.2%. This behavior weighed on oilseed prices and took away business momentum. During the week, the increase was 2.2%, contributing to the partial recovery of domestic prices.
By: Dylan Della Pasqua | Crops & Market
