2024-01-12 01:04:56
After the drought, rain in soy production areas in Brazil relieves the markets. Prices reached their lowest level in two years this week.
Rainfall had been insufficient for months, but rain finally fell in the major soybean-producing regions, particularly in Mato Grosso, where a quarter of the oilseed crop is grown. This “rain”, in the critical period for cultivation, which runs from approximately December 20 to January 15, was the best that could happen to farmers, after too long a drought.
Brazil avoids the “worst”
For the world’s leading producer and exporter of soya, this is a relief. Even if production has been revised downward by 4% by the national agricultural agency (CONAB) and will perhaps also be re-evaluated this Friday by the American Department of Agriculture (USDA), the upcoming harvest remains qualified as “ monster ».
« The worst would have been a Brazil below 150 million tonnes », Explains an analyst, which should not be the case. According to official Brazilian figures, production is currently estimated at 155 million tonnes, with exports which could reach 98 million tonnes. Enough to reassure operators who have been monitoring the weather for weeks.
These prospects for Brazilian production add to the rebound in Argentina and the good potential of Paraguay and Uruguay. According to the latest USDA estimates, the cumulative production of the three main South American exporting countries could be up by 25 million tonnes compared to last year.
“Panic” in the United States
These optimistic forecasts are accompanied by a deceleration of soybean purchases from China, after several months of sustained pace. And even if imports from the Middle Kingdom remain average, this is enough to further fuel the fall in prices.
This decline is particularly marked in Chicago, the benchmark stock exchange for agricultural commodities. “ The United States fell behind on its soy exports, now it is panicking », summarizes one of our interlocutors: they know that good production ultimately in Brazil also means less market share.
#Soybeans #lowest #level #years