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Cepea, January 3rd, 2024 – Both Brazilian and global soybean supply hit a record in the 2022/23 season. In Brazil, despite the longer process of planting and difficulties during the harvest, productivity was significant, which was responsible for offsetting the smaller supply in the United States and Argentina and guaranteed a record 2022/23 supply, of 374.39 million tons, according to the USDA. As a result, soybean prices moved down in 2023.
Brazil harvested the record of 160 million tons of soy in 2022/23, for an increase of 22.6% compared to the season before. The US harvested 116.22 million tons, 4.3% down in the same comparison. In Argentina, La Niña was intense, causing a significant lack of water; therefore, the production totaled only 25 million tons, the smallest volume since 1999/2000.
Due to the high supply, 2023 has started with decreases for soybean export premiums in Brazil, which registered negative levels, a scenario that had not been observed since June/21, considering the first contract.
Between March and April, besides the higher domestic supply, producers were willing to trade because of the need to make cash flow. Thus, soybean prices were pressed down and export premiums were the lowest since 2004.
In the second semester, the Brazilian industry was willing to purchase soybean. This scenario boosted the competition between domestic and international purchasers, increasing quotations in the Brazilian market. Moreover, Brazilian soybean growers were refrained from sales involving big amounts, and some of them preferred to hold the product left from 2022/23, expecting higher values.
From September to October, prices resumed moving down, influenced by international price drops, which was linked to the 2023/24 crop in the US and to the high volume of product left from 2022/23 in Brazil. In the last two months of 2023, quotations were sustained by the firm demand and unfavorable weather conditions for the 2023/24 planting in Brazil.
From January to December 22nd, Brazil exported a record volume of soybean, of 100.76 million tons, 28% more than that registered in the entire year of 2022. Shipments to China (major destination for the national product) increased 32.8%, amounting 71.19 million tons up to November. Argentina was the second major destination, with 3.98 million tons sold by Brazil.
As for prices in the domestic market, the ESALQ/BM&FBovespa Index (Paranaguá) and the CEPEA/ESALQ Index (Paraná) registered the lowest annual averages since 2019, in real terms (IGP-DI Nov/23), at BRL 149.37 per 60-kg bag and BRL 142.12/bag, downing 17.2% and 19.6% between 2022 and 2023.
BYPRODUCTS – Soybean meal and soybean oil prices also registered the lowest levels since 2019, in real terms. However, price drops were limited by the firm demand, especially from abroad – the lower supply in Argentina directed the international demand to Brazil.
(Cepea-Brazil)
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Fonte: Cepea