Cepea, May 3, 2018 – Dollar rises against Real boosted soybean prices in Brazil in April. In the last week of the month, the American currency reached the highest level since June 2016. In that scenario, the monthly averages for the ESALQ/BM&FBovespa soybean Index at Paranaguá and the CEPEA/ESALQ Index for Paraná, at 85.53 BRL and 79.60 BRL per 60-kilo bag, were the highest since July 2016, in real terms (IGP-DI from March/18).
Still, most Brazilian growers were retracted from sales of large batches, expecting to trade soybean at higher prices in the coming weeks. Besides, the gap between bidding and asking prices limited trades.
Growers expect Brazil’s share of global soy meal and oil supply to increase. Besides the crop failure in Argentina, shipments were reduced in that country, due to an accident at General San Martin port on April 24. Harvesting advances in Argentina continue to confirm the low productivity forecasts and, according to the Buenos Aires Grains Exchange, 54% of the area had been harvested until April 26.
This scenario boosted soy meal export premiums in Brazil, mainly for the contracts due from October onward.
The Brazilian animal protein sector reduced soy meal purchases in late April, in light of a possible decrease in poultry production, since the European Union has suspended around 20 Brazilian slaughterhouses from exporting broiler to the bloc. Thus, many domestic purchasers were interested in acquiring soy meal batches only for prompt-consumption, limiting price rises in Brazil.
Larger soybean inventories, due to the harvesting end, limited price rises for that by-product as well. According to agents consulted by Cepea, only a few growers from Rio Grande do Sul, Santa Catarina, Bahia and Maranhão, where sowing takes place later, need to end fieldwork in the 2017/18 season. Growers from these regions claim that productivity is above the expected. In Rio Grande do Sul, harvesting has reached 91% of the area, according to Emater/RS.
On April 30, dollar closed at 3.506 BRL, the highest level since June 2016. Thus, between March 29 and April 30, the ESALQ/BM&FBovespa soybean Index at Paranaguá rose 7.9%, to 86.80 BRL (24.76 USD) per 60-kilo bag on April 30. In the same comparison, the CEPEA/ESALQ Index for Paraná increased 8.2%, to 81.24 BRL (23.17 USD) per 60-kilo bag on April 30.