Weather concerns, but sowing advances in BR and production may be a record

Cepea, October 17 2019 – Soybean sowing stepped up in Brazil in the first half of October, mainly in Paraná and the central-western region, favored by rains. However, precipitation was scattered, concerning agents about crops germination and development. In southeastern BR, activities were at a slower pace, due to the low soil moisture.

 

In Paraná, according to Deral/Seab, of the total area estimated for corn crops in the state (5.5 million hectares in 2019/20), sowing had reached 22% until October 6, less than the 38% from the same period last year. In Mato Grosso, 6.65% of the area had been sown until October 4, less than the 12.62% from the same period last year.

 

Despite the unfavorable weather, Conab (National Company for Food Supply) estimates the Brazilian soybean output to total 120.39 million tons in the 2019/20 crop, 4.7% higher than that in the previous season and a record. Conab forecasts consumption to reach 48.63 million tons in Brazil, and exports, 72 million tons, 7.6% and 2.9% up, respectively, compared to that in the 2018/19 crop. Thus, ending stocks should total 1.28 million tons, 6.2% lower than the 1.37 million tons forecast for the 2018/19 season (which ends in December 2019).

 

TRADES – In light of the uncertainties about the global soybean output, many Brazilian growers have been away from the market, expecting higher remuneration in the coming months. The trading pace for the product to be delivered in March/20 is faster, since many purchasers are trying to buy batches, despite the high price levels.

 

Besides sellers’ retraction, the US dollar appreciation and the increases in the future contracts at CME Group (Chicago Mercantile Exchange) underpinned quotes in BR in the first fortnight of October. However, the upward trend of prices was constrained by the steep decreases in exports premiums.

 

Between September 30 and October 15, the ESALQ/BM&FBovespa soybean Index at Paranaguá rose 3.3%, to 89.66 BRL (21.56 USD) per 60-kilo bag on October 15, and the CEPEA/ESALQ Index for Paraná increased 3%, closing at 83.33 BRL (20.04 USD) per 60-kilo bag.

 

EXPORTS – In September, Brazil exported only 4.44 million tons of soybean, the smallest volume shipped since January/19, 16.4% less than that from August and 3.1% down compared to that from September/18. This year, Brazil has exported 63.82 million tons of soybean, 7.8% less than the 69.18 million shipped in the same period last year.

 

It is worth to mention that, in September, not even the sharp dollar appreciation against many other currencies encouraged sales. The US dollar averaged 4.124 BRL last month, 2.5% higher than in August.

 

(Cepea-Brazil)

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