Porto Alegre, August 05th, 2025 – Soybean prices accumulated another week of lows, reflecting the proximity of August—a critical month for the development of the US crop—and weather forecasts that continue to indicate good conditions in the US growing belt. Maps continue to point to regular rainfall for next month, which tends to consolidate production potential. In the trade scenario, uncertainties persist regarding relations between the United States and China. To date, there has been no definitive agreement between the two powers, which limits predictability about the flow of US exports. There is only one extension to the 90-day tariff truce, pending a definitive agreement.
In the current soybean market, with no consistent signs of crop failure or significant production losses in the United States, attention turns to the pace of new crop shipments and the behavior of Chinese demand. Brazil continues to have high export commitments compared to the previous year, while USDA, in its July report, reduced its export projections for the new US crop. This transition between the old and new crops in the United States may still undergo adjustments, especially considering the strong performance of foreign sales in recent weeks, which may lead USDA to revise its projections and reassess carryover stocks.
On the other hand, physical shipments remain slower than necessary to meet the total estimated volume. There are still approximately 3.8 mln tons to be shipped in the next six weeks of the current business year, which would require an average of close to 600,000 tons per week, above the current pace. If this volume is not reached, some of it could be accounted for in the next business year, implying inventory adjustments and possible distortions in export estimates. Meanwhile, futures contracts in Chicago remain under pressure, reflecting expectations of lower demand at the start of the US crop. The spread between the November/25 contract (ZSX5, the benchmark for the US crop) and the March/26 contract (ZSH6, the benchmark for Brazilian soybeans) is around USD 0.35/bushel. This differential reinforces attention on the possible arrival of a new record crop in Brazil, with estimates already pointing to up to 180 mln tons.
In this scenario, buying put options on the March/26 contract emerges as a viable hedging strategy, given the prospect of abundant global supply. Chicago is testing important technical support levels, with the possibility of a pullback to the USD 9.50-9.00/bushel range if pressure on fundamentals intensifies.
If Brazil maintains a strong export pace, adjustments should occur via export premiums, keeping the CBOT under pressure from both fundamentals and technical factors. Although occasional corrections may occur—which is natural in a volatile market—the structural scenario remains the same: no shortages and no expectation of price reversals. Furthermore, even with the possibility of a reduction in the use of technology in Brazilian planting next season, climate maps remain favorable, indicating good rainfall at the beginning of the season, which tends to mitigate potential productivity losses.
Safras News
