Porto Alegre, June 4th, 2024 – Soybean prices reacted in Brazil and on the Chicago Board of Trade (CBOT) in May, a period in which growers took advantage of rebounds to boost sales. The floods in Rio Grande do Sul raised doubts about the size of the Brazilian crop – which will be smaller than expected – helping to stimulate internal prices via premiums and Chicago. Furthermore, a firm dollar also prompted important support. The CBOT futures contracts also found support in the speculation about the weather in the US and a slower selling pace in Argentina.
The 60-kilogram bag went up in May from BRL 123.00 to BRL 133.00 in Passo Fundo (RS). In Cascavel (PR), prices increased from BRL 123.00 to BRL 130.00 in the period. In Rondonópolis (MT), they increased from BRL 115.00 to BRL 125.50.
In the port of Paranaguá, the bag rose from BRL 130.00 to BRL 138.00. The premiums, even with an increased supply, firmed up, basically due to the presence of Chinese demand, which, in practice, was concentrated in South America.
On the CBOT, contracts expiring in July – the most traded – appreciated by 3.61% in May, closing the month at USD 12.05 per bushel. Despite this, the contracts reached the level of USD 12.48 at the close of the 24th, which resulted in an appreciation of 7.31%. Even with the good progress of planting in the United States and with a still weak demand for the US product, concerns about Rio Grande do Sul’s crop and signs of a slower selling pace in Argentina supported prices. Additionally, there was some speculation regarding the climate for the evolution of the US planting, which is quite common at this time of year.
The exchange rate also favored the soybean business in Brazil. The dollar closed the month at BRL 5.2497, accumulating an appreciation of 1.11% compared to the end of April. Concerns about the future of US interest rates, which could remain high for longer, and domestic fiscal uncertainties supported the US currency.
For June, the weather market in the United States and the actual figures of the crop failure in Rio Grande do Sul should dominate attention and impact prices here and abroad. In addition to the USDA’s monthly report, at the end of June the market will receive the consolidated data on the US planting.
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