Cepea, June 1st, 2021 – Soybean prices faded in Brazil in May, due to the absence of purchasers in the domestic market and also because of international devaluations and the dollar depreciation against Real. Lower demand in the Brazilian market is linked to the also weak demand for soybean meal, since most purchasers have built inventories of this by-product.
Between April 30 and May 31, the ESALQ/BM&FBovespa Index Paranaguá (PR) and the CEPEA/ESALQ Index Paraná dropped by 3.7 and 2.2%, respectively, to 172.96 BRL (33.10 USD) and 168.22 BRL (32.20 USD) per 60-kilo bag on May 31. The US dollar dropped by 3.8% in the same period, to 5.225 BRL on May 31.
As regards soy oil, the demand for this by-product to produce biodiesel is expected to be lower in the fourth bimester of 2021, due to the reduction in the mandatory biodiesel blending level, which has been kept at 10% (B10). Still, agents from the Brazilian food sector claimed difficulties to purchase the product, which pushed up quotes in the domestic market.
In São Paulo city, the average price for soy oil set a nominal record on May 18, closing at 7,842.14 BRL/ton (with 12% ICMS). Lower oil supply is linked to the fact that some Brazilian processors began the maintenance period ahead of schedule, as a strategy to keep their crush margin stable.
According to data from Abiove (Brazilian Association of Vegetable Oil Industries) released on May 14, soybean crushing in the first quarter of 2021 was 20.4% lower than that in the same period last year – these data accounts for 85% of the monthly sample.
Imea announced a decrease in soybean crushing in Mato Grosso in April, which totaled 956.08 thousand tons, 1.63% down from that in March (917.9 thousand tons). Between January and April 2021, crushing was 4.32% lower than that in the same period of 2020.
ESTIMATES – Thus, Abiove reduced estimates for soybean crushing in Brazil, by 46.8 million tons, a slight 0.1% down from that last season, resulting in productions of 35.76 million tons of soybean meal and 9.45 million tons of oil.
The domestic consumption of soybean is estimated at 17.4 million tons, 8.19% lower than that last season; exports are forecast at 17.1 million tons, a record.
As for soy oil, exports should decrease by 9.89% compared to that last year, estimated at 1 million tons in 2021. On the other hand, domestic consumption should set a record, at 8.9 million tons, 4.33% higher than that in 2020 (Abiove).