Porto Alegre, January 25, 2021 – Last week brought a set of information that is hard to be fully interpreted. The entry of a new US government, the pandemic’s still steady progress, not so positive economic data, a certain concern from markets so that demand absorbs high commodities prices without a full economic recovery, and political attention to this US-China relationship weighed on the movement of prices and markets. In the case of corn, wheat and soybean, the losses were quite significant due to the improvement of the climate conditions in South America, the beginning of the Brazilian harvest, and a seasonal convergence of the global demand for this supply to the detriment of US corn. There are reports that a new variant of African swine fever is again affecting Chinese swine production, a situation not yet revealed by OIE.
Since the US harvest in September/November, commodity prices on the CBOT have found room for highs. It is not normal that in a harvest period prices find room for sudden highs. However, the strong fall of the dollar and high liquidity in markets led to a more aggressive action by investors in agricultural commodities, which changed from the year’s lows to surprising highs in the middle of the pandemic.
Agência SAFRAS Latam
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