SOYBEAN PRICES FALL IN BRAZIL AS EXPORT PREMIUMS DECLINE

SOYBEAN PRICES IN BRAZIL RECORDED A NEW DROP ON FRIDAY, DRIVEN BY THE SEASONAL DECLINE IN EXPORT PREMIUMS AND A WEAK INTERNATIONAL MARKET. ACCORDING TO CEPEA, THE 60-KILOGRAM BAG AT THE PORT OF PARANAGUÁ WAS TRADED AT R$ 141.75, A 0.35% DECREASE THAT REFLECTS THE LOSS OF EXPORT COMPETITIVENESS IN RECENT WEEKS. BRAZIL’S FOOD SUPPLY AGENCY, CONAB, NOTES THAT THE RISE IN U.S. SOYBEAN PURCHASES HAS ADDED PRESSURE ON PREMIUMS, WHICH WERE ALREADY MOVING DOWNWARD DUE TO SEASONAL FACTORS. WITH LOWER INCENTIVES FOR EXPORTS, BOTH DOMESTIC AND PORT-BASED PRICES HAVE BEEN WEAKENING, CREATING ROOM FOR FURTHER ADJUSTMENTS.

EXTERNAL PRESSURE ALSO COMES FROM THE CHICAGO BOARD OF TRADE, WHERE THE LACK OF CLEAR SIGNALS FROM CHINA REGARDING POTENTIAL LARGE-SCALE PURCHASES HAS LIMITED ANY UPWARD REACTION. JANUARY FUTURES CONTRACTS FELL 1.27% AND CLOSED AT US$ 11.0525 PER BUSHEL, A LEVEL THAT INDICATES A CAUTIOUS MARKET DEPENDENT ON DEMAND NEWS.

WITHIN BRAZIL, REGIONAL PRICES ARE MOVING IN LINE WITH THE BROADER MARKET, SHOWING DECLINES OR STABILITY ACCORDING TO LOCAL DEMAND, LOGISTICS COSTS, AND PRICE BASES RELATIVE TO PORTS. BELOW ARE THE LATEST QUOTATIONS REPORTED ACROSS KEY PRODUCING REGIONS:

REGION	PRICE PER 60-KG BAG (R$)
LUÍS EDUARDO MAGALHÃES (BA)	130.00
RIO VERDE (GO)	129.00
BALSAS (MA)	127.00
TRIÂNGULO MINEIRO (MG)	131.00
DOURADOS (MS)	126.50
SANTOS (SP) – PORT	143.00
RIO GRANDE (RS) – PORT	143.50

THE CURRENT SCENARIO INDICATES THAT, AS LONG AS EXPORT PREMIUMS REMAIN DEPRESSED AND CHINA DOES NOT RESUME STRONGER BUYING ACTIVITY, BRAZILIAN SOYBEANS WILL CONTINUE UNDER PRESSURE IN BOTH DOMESTIC AND EXPORT MARKETS. VOLATILITY IS EXPECTED TO STAY ELEVATED OVER THE COMING WEEKS, PARTICULARLY AS THE SOUTH AMERICAN HARVEST APPROACHES AND ADJUSTMENTS IN PRICE PARITY AMONG BRAZIL, THE UNITED STATES, AND ARGENTINA BECOME INCREASINGLY NECESSARY.