Despite slight gains in soybean futures on the Chicago Board of Trade (CBOT) this Wednesday (14th), the Brazilian soybean market has remained sluggish, with few new deals being struck due to the significant price drops over the past few days. Soybean prices in Brazil have fallen by up to R$ 8.00 compared to the previous week, testing one of the worst moments of the 2023/24 marketing year.
A key factor providing some support to soybean prices is the exchange rate, with the U.S. dollar - although volatile - staying strong against the Brazilian real, trading above R$ 5.40. Additionally, premiums remain positive. Demand for Brazilian soybeans continues to be robust, and stocks are gradually depleting as the months progress.
In the first seven business days of August, soybean exports from Brazil reached nearly 2.4 million tons, with most shipments heading to China. From January to now, Brazil has exported 77.8 million tons of soybeans, indicating the strong demand for Brazilian soybeans.
Market consultant Vlamir Brandalizze from Brandalizze Consulting notes that Brazil still has over 40 million tons of soybeans to market, but new deals are unlikely to appear soon. He also believes that prices don't have much room to drop further. "For producers who don't need immediate cash, the best strategy might be to capitalize on currency opportunities. I don't foresee a significant spike in soybean prices in Chicago, as the U.S. crop is performing well," he says.
Brandalizze estimates that Brazil traded around 200,000 tons of soybeans from Monday to Wednesday, a modest volume for this time of year. The prices at ports and inland markets remain far from the levels seen in recent weeks. However, he advises producers not to view the current market situation as definitive.
CHICAGO BOARD OF TRADE
On the Chicago Board of Trade, soybean prices stayed in positive territory throughout the day, closing Wednesday's session with small gains of just over 5 points in the most actively traded contracts, bringing September to $9.52 and November - the benchmark for the U.S. crop - to $9.68 per bushel.
"Following recent declines, soybean futures in Chicago are experiencing a rebound today, supported by recent spot sales of U.S. soybeans," according to analysts from Pátria Agronegócios. The market is undergoing a technical correction after losing more than 2% in each of the last two sessions, driven by the surprising numbers released by the USDA (U.S. Department of Agriculture) on Monday (12th). Thus, while the fundamentals remain the same, the day is marked by an adjustment.
As supply is monitored, demand also plays a crucial role in stabilizing prices at this time. In recent days, the USDA has announced new soybean sales to China and unspecified destinations, as well as revised its export estimates for the 2024/25 season to just over 50 million tons. However, the total soybean volume already committed by the U.S. for export this season remains one of the lowest in recent years for this period.
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