International price sets a record; liquidity is higher at Brazilian ports

Cepea, May 18, 2021 – On May 12, the future contracts for soybean hit the highest nominal levels at CME Group (Chicago Mercantile Exchange) since September/12, at 16.605 USD/bushel (35.54 USD/60-kilo bag). This increase is related to expectations for higher soybean consumption and low inventories in the United States (inventories are forecast to be the lowest in the last seven years). However, news indicating an interruption on the traffic on the Mississippi river constrained international valuations.


This scenario increased the trading pace for soybean at Brazilian ports, and national sellers were more interested in marketing soybean than corn, based on the record soybean crop and on the expectations for higher ending stocks.


PRICES – Soybean prices dropped in Brazil in the first fortnight of May. Between April 30 and May 14, the ESALQ/BM&FBovespa Index Paranaguá (PR) and the CEPEA/ESALQ Index Paraná decreased by 1.6% and a slight 0.1%, respectively, to 176.84 BRL (33.56 USD) and 171.88 BRL (32.61 USD) per 60-kilo bag on May 14.


EXPORTS – According to Secex (Foreign Trade Secretariat), in April, Brazil exported 17.38 million tons of soybean, 34% up from that in March, 17% higher than that in April/2020 and a record. This year (January – April), shipments are at 33.06 million tons, a record for the period.


Now, agents are focused on the 2021/22 season in the Northern Hemisphere. According to the USDA, the world area allocated to soybean is estimated at 132.5 million hectares, 3.65% larger than that in the 2020/21season and a record. As a result, the output should set a record too, forecast at 385.52 million tons, 6.22% higher than that in the 2020/21 season (362.94 million tons). Global trades should grow by 0.9%, to 172.9 million tons, and crushing should increase by 2.88%, to 331.69 million tons.


Higher crushing is linked to the also higher global demand for soy oil. According to the USDA, oil consumption should be a record in the 2021/22 season, forecast at 61.86 million tons, 3.69% up from the 59.66 million tons forecast for the 2020/21 crop. The demand from the food sector should increase by 2%, and from the industrial segment, by 10.82%.


BRAZIL – The USDA estimates the soybean area in Brazil at 40.4 million hectares, a new record. The output is forecast at 144 million tons, 5.88% up from that in the 2020/21 season (estimated at 136 million tons). Crushing is expected to total 47.7 million tons (between Oct/21 and Sept/22), 2.03% higher than the 46.75 million tons predicted for 2020/21. Domestic consumption should grow by 1.93%, to 50.35 million tons in the 2021/22 season, a new record. Exports are estimated to set a record too, at 93 million tons. Still, inventories are forecast at 23.33 million tons, 5.89% higher than that in the previous season.




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