Brazilian soybean trading has another month of little progress


     Porto Alegre, July 13 2021 – June was again a month with little evolution in the Brazilian soybean trade. Brazilian growers reduced their selling pace compared to May due to strong negative adjustments in domestic prices over the month. The sharp lows registered in Chicago and the dollar pushed Brazilian prices down, taking away the interest in new sales on the part of growers. In Chicago, issues involving demand, such as possible Chinese intervention in the market and possible lower mix in biofuel blending in the US, put pressure on prices. Despite this, the adverse climate registered in much of the US growing belt brings support to the market. Sellers are closely watching this climate issue in the United States. As most of the available crop has already been negotiated, growers start to speculate with the remaining volumes, betting on production problems in the current US crop.

     According to a survey carried out by SAFRAS & Mercado, with data collected until July 9, 79.2% of the current Brazilian soybean crop (2020/21) have already been sold, up 3.6% from the month previous (75.6%). The current percentage is equivalent to approximately 108.586 mln tons already traded from the production estimated at 137.194 mln tons. In the same period of the previous year, the index was 92.9%, while the normal five-year average for the period is 78.2%.

     For the new Brazilian soybean crop (2021/22), the percentage sold reaches 21.5% of a still hypothetical crop, with an increase of 2.3% compared to the previous month (19.2%). In the same period of the previous year, commitments reached 39.8%, while the five-year average is 17.6%. It is important to highlight that as SAFRAS & Mercado has not yet released its first production estimate for the next crop, the same production bases as in the 2020/21 crop were used for regional and national calculations. The planting intentions numbers will be released on July 16 and commented in our next weekly report, while the August update on trading will already be made considering the new numbers.

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