Rising dollar supports soybean prices and boosts business in Brazil in June

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Porto Alegre, July 8th, 2024 – The pace of Brazilian soybean sales returned to a period of good evolution in June and the first days of July. Although trading evolved less than in the previous month, the sales volume was considered good compared to the months prior to May. Once again, the firmness of prices, with highs supported mainly by the exchange rate factor, encouraged producers to move forward with new negotiations.

In June the dollar rose by 6.49% against the Brazilian currency, going from BRL 5.2497 (end of May) to BRL 5.5906 (end of June), thus improving the formation of internal prices, which reached BRL 142.00 in the port of Paranaguá in the month’s highs. At the beginning of July (2), prices reached BRL 146.00 in Paranaguá, in a session marked by highs in both the dollar and Chicago futures. Such moments encouraged the advancement of sales on the producers’ side.

The commercialization of Brazil’s 2023/24 soybean crop now involves 71.8% of the projected production, according to a Safras & Mercado report, with data collected until July 5. The number points to an increase of 7.2% over the 64.6% registered in the previous report, with data until June 10.

In the same period last year, trading involved 66.1%, and the five-year average for the period is 76.7%. Taking into account the production estimated at 149.705 mln tons, the total soybeans already traded is estimated at 107.459 mln tons.

Regarding the new crop, taking into account a hypothetical minimum crop of 149.705 mln tons, SAFRAS projects sales in advance of 14.6%. In the previous report, until June 10, the percentage was 9.9%, which indicates an increase of 4.7%. In the same period last year, forward sales were at 11.1%, while the five-year average for the period is 20.6%.

It is important to highlight that, at this moment, we still use the basis of the 2023/24 crop to estimate the commercialization of the new crop, as our first estimate for the Brazilian production of the 2024/25 season will be released on July 12.

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