Soybean oil up more than 4% on Chicago spot market, grain follows and…

This Thursday (2), soybean futures traded on the Chicago Stock Exchange ended the trading session with increases of more than 2% among the most traded contracts, or recording gains of 26.50 to 39 points. Thus, July was at US$ 17.29 and August at US$ 16.58 per bushel. Part of the support for the forward movement came from oil, with gains of more than 2% in CBOT and from bran, which rose more than 0.5%.

In the first month – July/22 – the oil rose 4.26%, closing at 81.44 cents per pound, while the others concluded the deals rising more than 3% in slightly longer positions, all looking for 80 cents/lp. Soybean oil follows a scenario of very strong positive fundamentals among all vegetable oils, as well as diesel and petroleum, which also rose in this session.

“Soybean oil took the lead on its own this Thursday, with the European market today giving a lot of support to the highs in oils, already in line with Indonesia’s falling exports”, explains the director of Pátria Agronegócios, Matheus Pereira. “Palm oil was the trigger for the rise in soybean oil today, however, the palm market closed early in the morning, already leaving a point of support for the soybean complex since the early hours of the day”, he adds.

The behavior of a more heated demand at this moment was another important point this Thursday and, according to analysts and consultants, there is an important strength of the fundamentals on the market at this moment.

The US has already committed about 60 million tons of 2021/22 soybeans against the latest USDA (United States Department of Agriculture) estimate of just over 58 million. “The USDA will have to revise the North American demand upwards and this will put pressure on ending stocks there, which are already tight”, explains Marcos Araújo, market analyst at Agrinvest Commodities.

This Thursday, the US department announced a new sale of 352,000 tonnes of soybeans to Pakistan. Of the total, 55 thousand tons were from the old harvest and 297 thousand from the new harvest. The country continues to be in demand for the 2021/22 product and helps to strengthen the pillar of support for oilseed futures.

Yesterday, the USDA had already informed about another sale, to China, of 132 thousand tons, with half 2021/22 and the other half 2022/23.

“Importers, including China, are still buying for July and August, which shows that their stocks are very short”, adds the Agrinvest team.

Not only has the demand for exports been strong, but the domestic demand in the US is also sustained, the margins of the industries are good and help support. After all, the search for derivatives is intense, which helps to maintain firm premiums for soybeans in the US, as well as in Brazil. The demand for soy biodiesel – and corn ethanol – is at a very intense moment, following the high levels of oil prices.

Likewise, attention continues on the weather in the United States and the progress of field work, as expectations about the new North American crop are high. Planting is now over 66% and the focus is now on the rains in the next few days in the Corn Belt and the impact this will have on the future of soybean and corn areas in the country.

“The rapid advance of corn planting in the US, the better profitability in relation to soybeans, the greater demand for soybeans and the low competitiveness of the American cereal in the international market are some of the reasons that made this relationship favor soybeans again. on corn”, explains Eduardo Vanin, market analyst at Agrinvest Commodities.

At the same time, but no less important, the market is also closely monitoring the unfolding of the conflict between Russia and Ukraine. On Thursday, Russian Foreign Minister Sergei Lavrov said it needed “non-aggression guarantees on its commercial vessels. Ukraine demands the withdrawal of Russian vessels from export routes,” the consultancy said.

More than that, Ukraine has accused Russia of shipping stolen wheat through the port of Mariupol.

BRAZILIAN MARKET

In Brazil, the dollar fell again this Thursday and closed below R$ 4.80. The American currency had another day of losses and ended the day yielding 0.22% and being worth R$ 4.79. However, despite some pressure from the exchange rate on soybean prices in Brazil, the hikes in Chicago have helped to neutralize exchange losses and help to guarantee prices that are still remunerative for the domestic producer.

Furthermore, in dollars per bag – for the soybean farmer who carries out this type of operation – the indicators are still favorable, registering values ​​above US$ 40.00/bag.

Added to this scenario are still strong and very favorable premiums for the formation of Brazilian soybean prices, especially for months ahead, with August registering more than 200 cents – or US$ 2.00 – per bushel above prices on the Chicago Stock Exchange.