Porto Alegre, August 13th, 2025 – Last week saw strong market movements with soybeans. From Wednesday onward, physical prices remained supported, especially in the interior, due to the high local basis. At the port, fluctuations were more contained due to several factors: first, premiums remain very firm, above USD 2.00 per bushel in the September and October estimates; second, the dollar remains resilient, influenced by geopolitical issues and, primarily, interest rates. Despite another month of heavy public spending and a primary and nominal deficit totaling over BRL 100 bln, the interest rate differential—with the Copom maintaining 15% in Brazil while US interest rates were stable—still favors the dollar flow, coupled with the high level of exports, which sustains the inflow of dollars and helps replenish the Central Bank’s reserves.
However, besides a slightly weaker dollar, Chicago is accumulating losses. Although the week showed more stable behavior, soybeans were close to USD 10.50 for the July contract and are now around USD 9.70 for the November contract. In other words, it is not only the strong movement in export demand that has offset premiums, but also a combination of the dollar and CBOT. This explains why, at the port, the indicators are not as “explosive,” although, within the context, they still represent very favorable prices for sellers.
In the interior, however, considering the industry and highly costly logistics, local prices remain very strong, with a truly high basis and values well above parity. Producers continue to bet on further soybean price hikes. The industry, even with pressured margins, continues to seek product and slow down offers. However, we have observed a large spread—in some regions between BRL 5 and 7 between buyers and sellers—which could slow the selling pace and force mills to shut down earlier than expected. In this case, the risk for producers is remaining with high inventories and missing sales opportunities.
The central point is the bet that China will buy few US soybeans, as there are no trade agreements in place. This scenario is uncertain: China still relies heavily on US soybeans. Brazil, of course, is an obvious option, but to truly gain relevance in this comparison, China would need to significantly reduce their purchases from the United States. Furthermore, there is nothing to prevent China from opting not to impose tariffs on oilseeds in a potential new round of tariffs, precisely because it relies on US products. The US government, for its part, would not accept any triangulation. The bottom line is that August should bring news, including an extension of the 90-day truce until further notice.
This scenario is already partially priced in the market. First, we have a full US crop estimated at around 118 mln tons. Second, an expected decline in new-crop exports—not as steep as current figures. Anything that shifts from the US crop to Brazilian soybean demand tends to increase US stocks. US crushing capacity is already high due to soyoil, but it depends on government incentives and industrial expansion, something that will not be resolved in the short term. The result: a soybean surplus in the United States means negative pressure on the futures market, unless there is a crop failure, which is not likely at all.
Another important point is that, although Brazilian soybean export commitments are very high and aggressive, they are still not sufficient, according to current projections, to put pressure on domestic stocks, considering the production scenario in 2025. In the interior, prices remain firm because producers are holding back sales, but at some point, trading companies will begin to reduce or end their export programs, concentrating supply in the domestic market. Brazilian exports, for now, are projected at 104 mln tons—a historic record—but are still expected to leave carryover stocks four to five times larger than that observed in the previous crop.
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