The price of soybeans rose 2.6% in Chicago and was once again close to an all-time high

Soybeans closed today with increases of 2.6% on the Chicago Stock Exchange due to the confirmation of the close relationship between supply and demand, not only of oilseeds, but also of vegetable oils due to the sharp reduction in exports of oil of sunflower from Ukraine and Russia, the world’s leading supplier, today in the midst of a war that is far from over. Rising from $ 604.62 to $ 620.60 per ton, soybean’s May position in the US market once again approached the all-time high of $ 650.74 per ton it reached on September 4, 2012.

The wheel’s bullish momentum solidified after the release of the U.S. Department of Agriculture’s monthly agricultural estimates report (USDA), where the agency reduced its forecast for final soybean stocks in the United States from 7.77 to 7.07 million tons, compared to the 7.13 million calculated on average by operators. According to the organization, this adjustment responded to higher exports – they were increased from 56.88 to 57.56 million tons – to compensate for lower sales from Brazil.

In this sense, Brazilian soybean production was estimated by the USDA at 125 million tons, down from an estimated 127 million in March. Exports, meanwhile, have been reduced from 85.50 to 82.75 million. Last May, when the agency carried out its first assessments of the 2021/2022 soybean campaign in Brazil, it estimated production and overseas sales at 144 and 93 million tons. The drought that hit southern Brazil was responsible for upsetting those initial expectations.

Yesterday, the National Supply Company (Conab), an employee of the Brazilian Ministry of Agriculture, was even more pessimistic with its forecasts in its monthly report, placing the harvest volume at 122.43 million tons and forecasting grain exports. in 77 million.

Another notable fact in the USDA report released today was the renewed reduction in sunflower oil exports from the Black Sea area in the midst of the war. Indeed, it adjusted Ukraine’s sales from 5.75 to 4.95 million tons and Russia’s from 3.65 to 3.20 million. Prior to the start of the war, exports from these countries were forecast at 6.65 and 3.80 million tons respectively in the February report.

In the eyes of the operators and administrators of large investment funds, the reduced availability of sunflower oil will force buyers to seek out new suppliers and diversify varieties, as there aren’t many other suppliers that can make up for the shortage of sunflower oil. Like this, More business opportunities are expected for sellers of soybean oil, a market led by Argentina, with USDA expected exports at 5.90 million tons. Behind are Brazil, with an expected turnover of 1.83 million tons, and the United States, with 782,000 tons, according to the US agency’s data.

The USDA figure with bearish potential provided today was the downward projection of Chinese soybean purchases, from 94 to 91 million tons. However, given the context of scarcity of cereals and vegetable oils, the lower imports from China had no impact on prices.

The external rises had a partial correlation in the domestic market, where the Matba Rofex lists showed increases of US $ 5 and 4.20 on the May and July positions of soybeans, whose adjustments were equal to 438.50 and 439 dollars for tonne. In the balance of the week these contracts increased by 4.8 and 4.3% compared to the 418.50 and 420 dollars in effect on the previous Friday.

In the physical market, the offers of the plants have grown slightly, from 430 to 435 dollars per ton of soy with immediate delivery to the terminals of the Gran Rosario and with some buyers that for important lots they would have stretched up to 438 dollars.

“The market today was unaware of Chicago,” he said THE NATION a local operator and added that the wheel passed very calmly and with little business, “partly because the harvest has already begun and the buyers know that the entry of goods will begin to increase, but also due to the strike of carriers announced for next week and the fact that manufacturers are busy with other problems, such as a lack of diesel. It all helps so that local prices stay far from sellers’ expectations, “he said.

The export market more fully reflected external increases. The FOB value of soybean grew from $ 645 to $ 660 per ton; that of oil, from $ 1,735 to $ 1,778, and that of flour, from $ 521 to $ 533 a ton, according to the Nation’s Ministry of Agriculture.

In its monthly report, the USDA made no changes to Argentina’s projected figures, as it kept soybean production at 43.5 million tons, bean exports at 2.75 million tons, exports of flour to 28 million and those of oil to 5.90 million.

Yesterday, in your weekly report the Buenos Aires Cereal Exchange revealed the trend of the Argentine soybean harvest over 8.8% of the suitable area, ahead of 3.6% at the same time in 2021, but lagging behind the 13.6% average of the previous five-year period. “The greatest progress of the harvest was recorded in both nuclei and in the north-central of Córdoba. To date, the national average yield is 31.1 quintals per hectare and the accumulated partial production is 4.4 million tons. The new frosts recorded during the last week could generate further losses in second-class soybean batches, which could affect our current production projection, which remains at 42 million tons, “the exchange said.

In its monthly report of agricultural estimates, Conab yesterday reduced its forecast for 2021/2022 Brazilian soybean exports from 80.16 to 77 million tons. This should not attract attention in a campaign that aimed for a harvest close to 145 million tons and which, due to the action of the dry climate in the south of the country, is now estimated at 122.43 million tons. However, in this latest report the adjustment is related to the growth in shredding and the expected increase in foreign sales of soybean meal and oil, two markets led by Argentina.

According to Conab’s detailed forecasts, and after increasing the milling estimate from 42.93 to 46.50 million tons, Brazilian soybean meal exports would amount to 17.34 million tons, above 15.87 million expected in March and of the 17.15 million shipped during the 2020/2021 campaign, when soybean production in Brazil hit a record 138.15 million tons.

“This would be a record volume for soybean meal exports from Brazil, but I believe that more than an elaborate plan to increase grinding and external sale of by-products, this is a consequence of the current situation, with China importing seeds. of soy in smaller amounts already at a slower pace, in addition to the good margins of Brazilian milling at the beginning of 2022, ″ Daniele Siqueira, from the consultancy firm AgRural, told LA NACION in Curitiba, Paraná.

He added that soybean grinding in Brazil went from 40.56 million tons in 2015 to 47.78 million tons in 2021, according to the Brazilian Association of Vegetable Oil Industries, which predicts 2022 milling to 48. million tons. “Brazil has idle capacity in its factories, which allows milling to increase over years of good prices and margins without necessarily having to set up new factories,” he assured him.

As for soybean oil, Conab yesterday raised its estimate of Brazilian exports from 1.10 to 1.57 million tons, slightly below the 1.65 million sold in the 2020/2021 campaign.

“Soybean oil production is pretty much the same as last year. From 2021 there has been an increase in oil exports to the detriment of the reduction in internal consumption. This comes after the Brazilian government reduced its mandatory biodiesel blend due to high commodity prices in an effort to reduce its impact on inflation. In 2021 the blend was supposed to be B13 (13% biodiesel in the cutoff for fossil fuels), but it was reduced to B10, which is the level that is maintained today, instead of the B14 that was supposed to be in place by 2022. This reduction of the mandatory blend did not really affect the size of soybean oil production, but it changed the dynamics of the market and caused part of the domestic consumption to migrate to exports, “Siqueira explained.

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