Soybean prices reduce losses but remain under considerable pressure in Brazil

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soybean

Porto Alegre, January 30, 2024 – With attention focused on the initial harvest, the Brazilian soybean market had a week of moderate trading pace and mixed prices, even with a slight improvement in some markets. Agents have closed just a few isolated trades, taking advantage of occasional rebounds in the dollar or Chicago futures. Premiums continue to lose strength in the face of greater regional supply, which prevents a more sustainable recovery of prices.

A 60-kilogram bag fell from BRL 124.00 to BRL 121.00 over the week in the region of Passo Fundo (RS). At the port of Rio Grande (RS), the bag rose from BRL 123.00 to BRL 124.00. In Cascavel (PR), prices dropped from BRL 109.00 to BRL 108.00. In Rondonópolis (MT), prices dropped from BRL 109.00 to BRL 103.50.

At the Port of Paranaguá, prices went from BRL 120.00 to BRL 119.00. Last week was marked by a consistent decline in export premiums, still in the negative field, given the arrival of the Brazilian crop.

On the Chicago Board of Trade (CBOT), contracts expiring in March, the most traded, fell 0.33% over the week, closing Friday at USD 12.09 per bushel. Over the week, contracts showed a reaction supported by technical factors, but in recent sessions the fundamental scenario once again weighed on prices. Even though the Brazilian crop had a setback due to the weather, the outlook is for a production of around 150 mln tons. In Argentina, production is expected to exceed 50 mln tons, adding 30 mln tons to South America’s supply, after a failure in the previous year. Paraguay and Uruguay also show good development.

In the forex market, the US currency remained above BRL 4.90 and, at some points during the week, approached BRL 5.00. For now, it has been a support factor for domestic prices. Yet, the dollar closed the week down 0.33%, quoted at BRL 4.9108. The beginning of the year has been marked by the outflow of dollars and uncertainty about the US monetary policy. Greater risk aversion in the global market favors the currency.

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