Dollar influences domestic prices in August, which end the month stable

Cepea, September 2nd, 2021 – Soybean prices dropped in the Brazilian market in late August, due to the dollar depreciation against the Real, once the premiums did not offset the decrease of the American currency. However, in the first fortnight of the month, values increased, also influenced by the dollar, which increased, making the national product cheaper to importers. Besides, low supply in Brazil and abroad influenced valuations too.


With the nearness of sowing the new season and the end of the planning period, Brazilian farmers were taking the chance to sell higher volumes from the 2020/21 and the 2021/22 seasons in the first half of August. However, some agents believed prices could rise even more and kept the product stocked in order to sell it in the last quarter of the year. In general, there are concerns about the weather in the new season because of forecasts for stronger La Niña phenomenon.


The Brazilian exports of soybean have been high, totaling 6.49 million tons in August, according to data from Secex (Foreign Trade Secretariat). The daily average of shipments was nearly 20% higher than that in August/20, and the price received in dollar, 36.4% up from that a year ago. On the average of 2021, Brazil has exported 71 million tons of soybean (Secex).


Between July 30 and August 31, the ESALQ/BM&FBovespa Index Paranaguá dropped by a slight 0.65%, to 166.95 BRL (32.26 USD)/bag on August 31. The CEPEA/ESALQ Index Paraná increased by a slight 0.5%, to 164.44 BRL (31.78 USD)/60-kilo bag.


EXPECTATIONS FOR 2021/22 – The area allocated to soybean crops in Brazil has been growing for 15 years. For the 2021/22 season, Conab (Brazil’s National Company for Food Supply) estimates the soybean area to total 39.91 million hectares, 3.6% larger than that in the previous season. The Brazilian soybean output may total 141.26 million tons, 3.9% up from that in the previous season (135.98 million tons), keeping Brazil as the major soybean-producing country in the world in 2022.


Soybean exports in the 2020/21 and the 2021/22 seasons are expected to set records, estimated at 83.42 and at 87.58 million tons, respectively. Demand from China is supposed to increase, according to Conab.


Besides, soybean production costs are currently high in Brazil, influenced by the strong dollar. This scenario is making farmers cautious when selling the product from the 2021/22 season – so far, 30% has been sold, against 60% in the same period last season, according to the agents consulted by Cepea.




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