Cepea, September 3, 2020 – Soybean prices hit new nominal records in Brazil in August. Between July 31 and August 31, the ESALQ/BM&FBovespa Index in Paranaguá (PR) rose by a staggering 15.6%, to 137.76 BRL/60-kilo bag (25.16 USD/bag) on August 31 – a nominal record in the series of Cepea, which started in 2006 for this product. In real terms, this level is near the real record in the Cepea series, of 139.20 BRL/bag, registered in September 2012 (monthly averages were deflated by the IGP-DI from July/20).
As regards the CEPEA/ESALQ Index in Paraná, it increased by 17.1% in the August, to 130.61 BRL/60-kilo bag (23.85 USD/bag) on July 31, also a nominal record in the Cepea series and the highest real level since September 2012, when the monthly average closed at 132.95 BRL/bag. The real record in the series, of 149.71 BRL/bag, was registered in October 2002.
High profit margins from processing soybean added to low inventories of the raw-material led Brazilian processors to pay prices similar to that at ports (for the product exported) for soybean. In this context, sellers opted for trading the product in the Brazilian market rather than exporting it.
Data from Cepea show that, on August 27, prices averaged 132.63 BRL/60-kilo bag in Dourados (MS), 130.30 BRL/bag in Rondonópolis (MT), 130.30 BRL/bag in the Triângulo Mineiro, 135.83 BRL/bag in Campinas (SP), 132.78 BRL/bag in Western Paraná and 133.11 BRL/bag in Ijuí (RS). At the ports of Santos (SP) and Rio Grande (RS), the 60-kilo bag was being traded at 132.29 BRL and at 133.58 BRL, respectively. This similarity between prices in the interior of the country and at ports is an unprecedent fact in the series of Cepea.
As prices are at nominal records and near the real records in some Brazilian regions, and with the low supply in Brazil (estimated to be lower than 5%), the Ministry of Agriculture is planning on suspending the 8% imports tariff on the soybean from out of Mercosur. However, this action will hardly have any effect, since the strong dollar is pushing up prices in Real.
BY-PRODUCTS – The interest of processors on soybean is linked to the good profit margins from by-products sales, whose prices have been at record levels in Brazil too.
2020-21 CROP – In mid-September, soybean sowing will be allowed to begin in Paraná, Minas Gerais, São Paulo, Mato Grosso, Mato Grosso do Sul and Rondônia. Even before sowing begins in Brazil, deals for the 2020-21 crop have already surpassed 50%, according to agents consulted by Cepea, which is a record for the period. This scenario is linked to the profit margins, which are currently attractive to soybean farmers – purchases of inputs and fertilizers are advanced too, according to data from Cepea.
2021-22 SEASON – Deals for delivery in 2022 were increasing in August, which is also unprecedent. Prices for the product to be delivered in the first quarter of 2022 are between 115 BRL and 120 BRL/60-kilo bag – similar to that for 2021.