Rains hamper harvesting activities and may delay contracts

Cepea, February 2, 2021 – Last year, the lack of rains delayed soybean sowing. Now, on the other hand, the excess of rains has limited harvesting activities, concerning Brazilian farmers, who have contracts to be accomplished. At Paranaguá port (PR), for instance, the line-up indicates that ships may start arriving in the first ten days of February. As a result, trading companies began to negotiate a new due date with international purchasers. This scenario may keep supply low in the mid and long-terms in Brazil.

 

The Brazilian industry is focused on the low availability of raw material. For the time being, crushing companies are operating with grains in stock. These players also have contracts to receive, likewise contracts of soybean meal and oil to be accomplished, and the demand is firm in Brazil.

 

In Mato Grosso, only 2.23% of the area had been harvested until late January, less than the 14.42% registered in the same period of 2020, according to Imea. Due to unfavorable weather conditions, Imea projects a decrease for productivity compared to the crop before. In Paraná and Mato Grosso do Sul, rains are forecast for this week, which may continue to limit the harvesting.

 

In Rio Grande do Sul, rainfall has favored the crops that are developing and even recovering areas affected by the dry weather. In São Paulo, some cooperatives are receiving small volumes of soybean from the new season (2020/21). Conab (Brazil’s National Company for Food Supply) says that the harvesting in the state has reached 10% of the total, more advanced than the scenario observed last year. The industry, however, reports that it has not received the product yet, so players are refrained from trades involving byproducts.

 

PRICES – Soybean prices increased in the Brazilian market in January, due to the higher export premiums and the dollar appreciation. Between December 30 and January 29, the ESALQ/BM&FBovespa Index Paranaguá (PR) rose by 9.36%, closing at 168.30 BRL (30.69 USD) per bag on Jan. 29. The CEPEA/ESALQ Index Paraná closed at 165.72 BRL (30.22 USD)/bag, 14.38% up in the same comparison.

 

(Cepea-Brazil)

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