Strong losses in Brazil for soybeans in April

Soybean prices fell sharply in April, pressured by a combination of negative factors. Even with declining prices, growers traded more, taking advantage of rare moments of rebounds and in fear of even more consistent losses. Premiums, dollar, and CBOT futures contracts had poor performance, forming a bearish scenario for the physical market and exports.

In Passo Fundo (RS), a 60-kilogram bag fell from BRL 150.00 to 133.00 in April; in Cascavel (PR), from BRL 142.00 to 126.50; and in Rondonópolis (MT), from BRL 136.00 to 118.00.

In the Port of Paranaguá, the prices dropped from BRL 154.00 to 137.50. Export premiums accumulated a series of losses in the period, recovering only at the end of the month. But they remain negative, reflecting the consistent increase in supply and falling demand, with Chinese buyers buying only what they need.

The combination of ample supply from Brazil, as a result of the advance of the harvest and yields exceeding expectations – which resulted in the production of 155 mln tons – and a start of planting without major problems in the United States weighed on futures prices in Chicago. The July contract ended the month down 3.81% at USD 14.19 per bushel.

Another important factor for the composition of internal prices, the exchange rate was also unfavorable to growers over the month, mainly in the last few days. The dollar dropped 1.60% in April, closing below BRL 5.00. At the close of April 28, the US currency was pegged at BRL 4.9880.

For May, the picture is not likely to change much. Even with the end of the harvest in Brazil, there is plenty of soybeans available. Attention turns to the weather market in the United States and crop development. So far, the weather has behaved well. Now growers had better wait for rebounding moments to negotiate.

Tags: soybeans, Production, futures, Market, losses, premiums, exports, prices