Estimates for higher world inventories press down values in Brazil and in the USA

Cepea, June 16, 2021 – Soybean prices dropped in Brazil in the first fortnight of June, influenced by estimates from the USDA indicating higher world inventories in the 2020/21 and the 2021/22 seasons. In the United States, prices dropped in the recent days too, but the dollar depreciation against the Real limited steeper devaluations in the country – as it makes the American product more attractive to purchasers – and reduced liquidity in the Brazilian market.


Between May 31 and June 15, the ESALQ/BM&FBovespa Index Paranaguá (PR) dropped by 4.9%, closing at 164.45 BRL (32.61 USD)/bag on June 15, the lowest nominal level since February 22. In the same period, the CEPEA/ESALQ Index Paraná decreased by 5.3%, to 159.24 BRL (31.58 USD)/bag, also the lowest level, in nominal terms, since February 22. The US dollar dropped by 3.48%, closing at 5.043 BRL on June 15.


2020/21 SEASON – The USDA has revised up estimates for the world production of soybean in the 2020/21 season to the record volume of 364.06 million tons, 0.31% higher than that previously estimated. This increase is linked to the record soybean production in Brazil, forecast at 137 million tons by the USDA and at 135.86 million tons by Conab (Brazil’s National Company for Food Supply).


Global trades continued estimated at 171.40 million tons. Of this total, 86 million tons should be exported by Brazil – according to data from Secex, 60.99% of this volume was shipped between October/20 and May/21.


World ending stocks are expected to be higher than that estimated until May, forecast by the USDA at 87.99 million tons, 1.68% up from that reported last month. However, this volume is 8.83% lower than that last season.


In Brazil, ending stocks (in September/21) are estimated by the USDA at 23.036 million tons, 4.5% up from that forecast in May and 11.09% higher than that in the previous season (2019/20).


2021/22 SEASON – The world soybean production in the 2021/22 season continues estimated at 385.52 million tons, a record if confirmed. However, ending stocks were revised up, to 92.55 million tons, 1.6% higher than that previous estimated and 5.18% up from that in the 2020/21 season. In Brazil, the output is forecast at 144 million tons.


With higher supply, Brazilian inventories in the 2021/22 season are estimated at 24.33 million tons, the highest since 2018/19, 4.29% up from that previously estimated and 5.64% above that in the previous season.




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