Supply decrease in RS concerns agents; soy and soybean meal exports hit records

Cepea, May 16, 2024 – Before floods caused destruction in Rio Grande do Sul state, players surveyed by Cepea expected that the higher soy production in RS could counterbalance (even in parts) the output reduction in areas in the Central-West and in the Southeast, which faced dry weather in the 2023/24 crop.

Now, since many crops in Rio Grande do Sul have been affected by weather conditions, both production and exports of soybean are likely to drop, limiting the availability in Brazil.

These uncertainties have been boosting soybean trades in the domestic spot market. Purchasers in Brazil are willing to build stocks and, as the international demand for soybean and byproducts is firm, Cepea has been observing a competition between purchasers in Brazil and in the world.

The ESALQ/BM&FBovespa Index (Paranaguá) rose 5% from April 30 to May 15, closing at BRL 135.51 per 60-kg bag on May 15. The CEPEA/ESALQ Index (Paraná) upped 4.5%, to close at BRL 130.11 per 60-kg bag.

ANP (National Agency of Petroleum, Natural Gas and Biofuels) informed a temporary change (for 30 days) in the mandatory blend of biodiesel to diesel of 2% for Rio Grande do Sul, lower than the 14% for the rest of the country. RS is the major biodiesel producer in Brazil.

EXPORTS – Brazil exported 36.79 million tons of soybean from January to April 2024, a record for the period and 10% more than that verified in the same period last year, according to Secex. In April alone, shipments totaled 14.69 million tons, the highest volume since May last year, 16.4% above that verified in March/24 and 2.5% higher than in April/23.

Although the volume exported is higher this year, the average price, in Reais, is the lowest since 2020, averaging BRL 135.62 per 60-kilo bag in the partial of this year. It is worth mentioning that the dollar valuation against Real in April interrupted the downward trend last month and limited the decrease in the partial of the year.

Soybean meal shipments also hit a record in the four first months of 2024, totaling 7.43 million tons, moving up 21.5% against the same period last year – data from Secex. In April, Brazil exported 2.3 million tons, a record for the month and the highest amount since August/23.

As for soybean oil, in April, Brazil exported the highest quantity since August/23, of 139.5 thousand tons, 11.5% more than in March/24. However, in the partial of this year, shipments totaled 336.21 thousand tons, 58.3% less compared to that in the same period of 2023 – data from Secex.

(Cepea-Brazil)