Prices drop in the Brazilian spot market, but continue firm for the coming months

Cepea, February 19, 2021 – Lower rainfall in the major soybean-producing regions in Brazil allowed the harvesting of the 2020/21crop to advance in the second fortnight of February. This scenario added to international devaluations and the dollar depreciation pressed down quotes for soybean and its by-products in the Brazilian market. On the other hand, for the mid and long terms, the export parity in Brazil and international futures point to firm soybean prices, which is linked to the fast decrease in the American inventories of the product.


Between January 29 and February 12, the ESALQ/BM&FBovespa Index Paranaguá (PR) dropped by 1.5%, to 165.73 BRL (30.82 USD)/bag on Feb. 12. The CEPEA/ESALQ Index Paraná decreased by 3.4% in the same period, to 160.06 BRL (29.76 USD)/bag. The US dollar dropped by 1.9%, to 5.378 BRL.


Abroad, prices were influenced by expectations for an increase in the area to be sown with soybean in the United States in the 2021/22 season. Thus, the export parity for soybean in Brazil, for shipment between March and August 2021, points to prices higher than bids in the spot market.


ESTIMATES – The Brazilian production of soybean is estimated to be a record – the USDA forecasts the output at 133 million tons, and Conab (Brazil’s National Company for Food Supply), at 133.81 million tons. However, the quality of the product to be harvested is still uncertain, which may affect by-products. The demand for Brazilian by-products should be a record, forecast at 18.5 million tons for soybean meal and at 1.15 million tons for soybean oil (USDA). Ending stocks are estimated to decrease by 1.71% in Brazil, to 20.34 million tons in September 2021.


CROPS – According to Conab, up to February 5, 13% of the soybean area had been harvested in São Paulo; 8.9% in Mato Grosso; 5% in Minas Gerais; 3% in Bahia and in Santa Catarina; 2% in Goiás; and 1% in Maranhão. Frequent rains in Mato Grosso do Sul in the first fortnight of February were hampering activities.


According to Imea, On Feb. 5, the soybean harvesting in MT had reached 11.2% of the state area, much less than the 44.51% from the same period last year. Farmers consulted by Cepea reported that part of the just-harvested soybean has lower quality, due to the unfavorable weather during the development of beans.




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