Soybean prices surpass 90 BRL at Brazilian ports; processors reduce crushing

Cepea, November 19, 2019 – Prices for the 60-kilo bag of soybean surpassed 90 BRL at Paranaguá port (PR) in the first fortnight of November. The boost came from the retraction of most growers, – who, in light of the uncertainties regarding the 2019/20 crop, preferred to keep the remaining beans from the 2018/19 crop – and the firm demand from both Brazilian processors and the international market.


Higher international demand, in turn, was linked to the US dollar appreciation against Real (by 4.4% in the fortnight), which made the Brazilian product more attractive to importers. On Nov. 14, the US dollar closed at 4.19 BRL, the second highest nominal level since the beginning of the Plano Real (1994).


With the price rises for soybean, the crushing pace slowed down – coming to a halt, in some cases – at processing plants, since many agents were having difficulties to increase quotes for soybean by-products (soybean meal and oil). Production should start again only at the beginning of next crop.


EXPORTS – In October, Brazil shipped 4.86 million tons of soybean, 9.5% more than that in September. This increase was linked to the firmer demand from China, which imported 4.38 million tons of the product last month, the highest volume since July/19, but 7.7% lower than that purchased in October/18. In 2019, Brazil has exported 68.69 million tons of soybean to all countries, 7.7% down compared to the amount shipped between January and October last year.


FIELD – Although recent rains have brought relief to some Brazilian soybean growers, the ones from São Paulo, Mato Grosso do Sul, Goiás, Bahia and Maranhão still have low water volumes. Despite the weather issues, Conab (National Company for Food Supply) increased estimates for the 2019/20 Brazilian soybean crop, by 0.39%, to 120.86 million tons, a record if confirmed.


As for the 2018/19 season, which ends in December/19, Conab revised down domestic consumption estimates by 45 million tons, 0.44% down compared to that forecast last month. This scenario should result in higher ending stocks, which are estimated at 1.5 million tons, 14.6% higher than that predicted last month. Exports, in turn, are forecast to reach 70 million tons – 69.88 million tons were shipped between January and November 8, according to data from Secex.


The world soybean output in the 2019/20 season is estimated to total 336.56 million tons, 6% down compared to the previous and the lowest since 2015/16, due to the smaller area allocated to soybean in the United States, at 30.6 million hectares, the smallest since 2011/12, according to data from the USDA.


PRICES – The ESALQ/BM&FBovespa soybean Index at Paranaguá closed at 90.24 BRL (21.54 USD) per bag on Nov. 14, 3.3% up compared to that on Oct. 31. The CEPEA/ESALQ Index for Paraná, in turn, closed at 84.64 BRL (20.20 USD) per 60-kilo bag, 3% up in the same comparison.




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