Exchange rate prevails over Chicago and guarantees better domestic soybean prices in April

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Porto Alegre, May 8, 2024 – The Brazilian soybean market had a month of moderate business and higher prices in April. The rise of the dollar against the real and the improvement in export premiums guaranteed the increase, which was limited by the fall in futures contracts on the Chicago Board of Trade (CBOT).

In Passo Fundo (RS), a 60-kilogram bag rose from BRL 121.00 to BRL 123.00 in April. In Cascavel (PR), prices increased from BRL 116.00 to BRL 123.00. In Rondonópolis (MT), prices increased from BRL 113.00 to BRL 115.00. In the port of Paranaguá, prices went from BRL 125.00 to BRL 130.00.

The exchange rate was the main driver for the improvement in benchmarks. The US currency reached a new level in April, remaining above BRL 5.00. Externally, the feeling that interest rates in the United States will remain high for longer helped to lift the dollar. In Brazil, concerns about the fiscal framework helped support the currency.

The dollar accumulated an appreciation of 3.55% last month, reaching BRL 5.19 at the end of April. During the month, the currency reached its highest levels in more than a year.

On the Chicago Board of Trade (CBOT), contracts expiring in May fell by 3.86% and ended April at USD 11.455 per bushel. The market remains under pressure from fundamental factors and also feels pressure from the global financial market.

Planting is progressing without any major problems in the United States. Furthermore, due to more attractive prices, demand is concentrated on the product from South America, to the detriment of US soybeans.

With the dollar and US treasuries paying well, the climate is one of risk aversion and capital flows into these investments, leaving commodities, including agricultural ones, in the background.

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