July 8, 2014

Prices of soybean and by-products have been declining in both the international markets and Brazil, according to the São Paulo-based research centre, Cepea.

Besides the positive development of crops in the US, the USDA indicates that the soybean area will hit a record in the country, which can result in a record supply. In this scenario, at CME Group, contracts with due dates between the last quarter of 2014 and the first semester of 2015 were most significantly pressed down. In Brazil, price drops were mitigated by higher export premium values and the dollar valuation.

On June 30, the USDA indicated that the planted area with soy in 2014 in the US might be 34.33 million hectares, higher than the March forecast of 32.98 million hectares. After the corn planting delay and high soy prices, producers have replaced crops.

In Brazil, the transference of price drops has been smaller and trades remain sluggish, given that producers still expect higher quotes in the second semester, based on exports, which are at record levels. In general terms, some agents say that domestic sales are moving at a slow pace.

 The ESALQ/BM&FBovespa Index for soy delivered at the Paranaguá port dropped 1.33% in the accumulated of June, to close at US$31.85 dollars per 60kg on June 30.

 The CEPEA/ESALQ Index for soybean (Paraná state - reference for trades in Brazil) averaged US$29.99 per 60-kg bag in the last business day of June, for a drop of 3.14% in the same period.

Regarding Brazilian soy exports, the amount in June was 6.89 million tons, 9.4% less compared to May 2014, but 6% more than in June 2013. In the first semester of 2014, Brazil shipped 31.8 million tonnes of soy, a record for the period, being 51% more compared to the average of the first semester over the last five years.

As for soymeal, Brazil exported in June the highest volume in almost three years, at 1.68 million tonnes, 18.4% more compared to the previous month and 32.8% above that in June 2013. Concerning soy oil, the total in June was 135 thousand tonnes (the highest since October 2013), 21.3% more than in May and 28.9% higher compared to May 2013.