Weekly sales in the US disappointed. However, the fact that China resumed purchases in the US market ended up encouraging traders, who were lacking bullish news. The market now awaits more significant volume of purchases from China, as part of the first stage of the trade agreement between the two economic powers.
China’s return to the US market must have a positive effect on Chicago, helping the May/20 position to move positively above the mark of USD 9.00 a bushel. However, it has a side effect: Chinese purchases in the United States at this time of year tend to withdraw demand from South America, which weighs against premiums at ports here.
The domestic physical market has reacted, supported by the record dollar and recovery on the CBOT. In Rondonópolis, soybeans changed from BRL 75 a bag in early February to BRL 78 now. An inflated dollar remains as the main point of support for domestic prices at the beginning of this season. The advance in the new crop supply, on the other hand, must weigh against prices, as well as the possible competition with US stocks, in case China resumes purchases of the US soybeans.
