Cepea, November 5, 2020 – The average prices for soybean have been extremely high this season, having hit real records in some Brazilian regions. The boost comes from the firm demand and the significant dollar appreciation against Real, which increased imports and exports parities. With growing exports, domestic inventories are currently low.
Sowing (2020/21 crop) has been slower than in previous years, which is increasing uncertainties about the volume to be harvested, meanwhile, early sales for this season have been fast. Thus, sellers have not been interested in closing new deals, neither for the remaining of the 2019/20 crop nor for the new season.
On the average of the regions surveyed by Cepea, from Oct/19 to Oct/20 (until Oct. 29), the prices paid to soybean farmers rose by 88.2%; in the wholesale market, quotes increased by 93.9%, both in nominal terms. The CEPEA/ESALQ Index in Paraná increased by a staggering 91.3% in the same comparison, averaging 158.03 BRL/bag in October, the highest, in real terms, in the series of Cepea, which started in July/1997 (values were deflated by the IGP-DI from Sept/20).
The ESALQ/BM&FBovespa Paranaguá (PR) – reference port for price formation of soybean in Brazil – has also been at record levels (in real terms) in the series of Cepea, which started in March/2006. In October, the average of this Index closed at 159.44 BRL/bag, 80.7% higher than that a year ago.
With the recent tax exemption on soybean imports from out of Mercosur, some processors increased purchases form the international market in order to keep supplying the domestic market with soybean meal and oil.
CROPS – With the rains in some Brazilian regions in late October and forecasts for more precipitation for other areas, sowing stepped up in Brazil. Some farmers in Paraná had already ended sowing by Oct. 31. In Minas Gerais, São Paulo, Goiás and Rio Grande do Sul, activities were interrupted by low soil moisture.
On the average of Paraná State, 61% of the area has been sown. In Rio Grande do Sul, low precipitation interrupted sowing, which had reached 7% until Oct. 29, less than the 11% from last year and the 12% on the average of the past five years, according to data from Emater.
In Mato Grosso, 24.87% of the area had been sown until Oct. 25, below the 64.5% from the same period last year and the 48.7% on the average of the last five years. In Mato Grosso do Sul, sowing has reached 30% of the area, according to agents consulted by Cepea. Low moisture in Minas Gerais and in São Paulo interrupted activities.