Sowing begins slowly in Brazil; prices near the real record

Cepea, October 2, 2020 – Rain showers in the second fortnight of September encouraged some Brazilian soybean farmers to start sowing the new 2020/21 crop. Thus, activities began in some areas from Mato Grosso, Minas Gerais, São Paulo and Paraná States.

 

However, many farmers were still concerned about the weather, waiting for higher rains in order to begin and/or continue sowing. Cptec (weather forecast agency) forecasts heavier rains only from October.

 

Meanwhile, as inventories are low, prices continued on the rise in September, nearing the real records in the series of Cepea. Agents were closing anticipated contracts – data indicate that around 60% of the supply expected for the 2020/21 season has already been traded in Brazil. Early sales should underpin prices in Brazil in the mid-term, limiting steep decreases despite the record crop.

 

Considering prices at Paranaguá port (PR), the most important port concerning price formation, the ESALQ/BM&FBovespa Index rose by a staggering 7.5% between August 31 and September 30, closing at 148.12 BRL (26.37 USD)/bag on Sept. 30. This is the highest nominal level in the series of Cepea (which started in March/2006) and slightly lower than the real record, of 153.40 BRL, registered on August 31, 2012 (values were deflated by the IGP-DI from Aug/2020).

 

The monthly average of this Index in September was 141.20 BRL, the highest since Sept/12, when it hit the real record, of 144.59 BRL/bag. It is worth to mention that prices in the interior of Brazil were also on the rise in September, at around 150 BRL/bag in central-western Brazil.

 

The CEPEA/ESALQ Index in Paraná increased by a staggering 11.9% in September, closing at 146.23 BRL (26.03 USD)/60-kilo bag on September 30.

 

(Cepea-Brazil)

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