Cepea, September 16, 2020 – China has resumed importing higher volumes of soybean from the United States, which boosted prices for the American product in the first fortnight of September – in the USA, soybean quotes have been at the highest nominal levels in more than two years. This scenario confirms a progress in the first phase of the trade deal between China and the United States, closed in January 2020. Thus, the international demand for the Brazilian soybean decreased, pressing down quotes at national ports.
According to a report from the USDA, the American exports of soybean in the 2020/21 crop totaled 1.295 million tons in the second week of the month, 60.2% more than that in the first week and 32.47% more than that in the same period last year.
In this scenario, at CME Group (Chicago Mercantile Exchange), the Sept/20 Future for soybean rose by 1.7% in the second week of September, to 9.8500 USD per bushel (21.72 USD/bag) on Sept. 10 – the highest nominal level for a first contract since June 6, 2018.
Valuations are also linked to the dollar depreciation in the international market, which makes the American product more attractive to importers.
The advance in the trade deal between the USA and China added to the dollar depreciation reduced the international demand for the Brazilian soybean. According to data from Secex, in August, Brazil exported the lowest volume of soybean and by-products since February 2020: 6.23 million tons of soybean, 1.49 million tons of soybean meal and 68.55 thousand tons of soy oil.
However, with the difficulties to purchase soybean in the domestic market, some Brazilian processors are importing the product. Although the volume imported in August was lower (78.91 thousand tons), the amount purchased this year (January to August) is the highest since 2014. The major supplier to Brazil is Paraguay, but Uruguay, Argentina and the United States exported soybean to Brazil last month too.
Thus, soybean prices at Brazilian ports and in the domestic market followed opposite trends in the second week of September. Agents from many processors were closing deals, and some of them paid prices higher than the exports parity.
At Paranaguá port, the ESALQ/BM&FBovespa Index closed at 136.98 BRL/bag (25.91 USD/bag) on September 15, 0.57% down compared to that on August 31. The CEPEA/ESALQ Index in Paraná increased by 2.3% in the same period, to 133.69 BRL/60-kilo bag (25.29 USD/bag) on September 15. On Sept. 14, this Index hit the highest nominal level in the series of Cepea (133.76 BRL/bag), which started in July 1997.
CROPS – In the first fortnight of September, Brazilian farmers were focused on the weather in both the United States – which should start harvesting soon – and Brazil, which may already start sowing soybean.
In Brazil, agents are concerned about the La Niña phenomenon, which may keep temperatures high and rains low in the last two months of 2020 in the major soybean producing regions.