Soybean price collapses in the domestic market – 03/23/2023 – Shuttle

Soybean prices melted this Thursday (23) in the domestic market. The bag was traded at R$ 144 in Cascavel (PR), the lowest value since December 2020, and at R$ 132.5 in Sorriso (MT), the lowest since September of that year.

In the last week, Cascavel producers from Paraná lost R$10.5 per bag, and those from Sorriso, R$12.

A good part of the farmers did not count on such an accelerated reduction. The drop is worrying because, on average, only a third of soy this year was sold.

This fall hypothesis, however, was not discarded, says Daniele Siqueira, analyst at AgRural. The market was looking a lot at Argentina’s historic losses and did not pay attention to the possibility of a confirmation of the Brazilian superharvest.

The Brazilian volume, despite the declines in Rio Grande do Sul, is even greater in this final stretch of the harvest. A high harvest and a lot of product yet to be sold brought prices down.

In Chicago, the May soybean contract closed at US$ 14.2, down 2% on the day. It is the lowest oilseed price since October 2022. Soybean oil prices returned to December 2021 levels and bran prices to last December.

Prices retreat sharply as China stepped on the brakes on new soybean purchases. The margins are not favorable for the industry in the Asian country, and the Chinese know that Brazil will have to place a greater volume of soybeans on the international market this year.

In addition to a accommodated external demand, Brazilians have to live with a discount of US$ 0.70 per bushel (27.2 kg) for the product traded in Paranaguá in relation to Chicago prices. It is the biggest discount since May 2013, says Daniele.

The drop in soybean prices in Chicago is also due to the sale of soybean, bran and oil contracts by investment funds. They were very high ranking and are now taking profits.

The magnitude of this drop was a little surprising, but it could be momentary and, after the scare, attention now turns to the 2023/24 North American crop.

North American inventories are low and therefore there will be no room for breaks. Furthermore, Argentines are out of breath for the foreign market, says the analyst.

Still in the external scenario, demand from China is weak and the country should purchase 97 million tons in the 2023/24 harvest, not much different from what they bought in the previous one, which already indicated a drop in relation to previous years.

If this scenario persists, Brazilian producers will not have the same price levels as in 2022, a year to remember.

Soy is the main national agricultural product. This year’s harvest is estimated at between 151 million and 155 million tons; the revenues of producers inside the gate should reach R$ 387 billion, and exports could exceed US$ 66 billion.

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