Opposite to soybean and oil, soybean meal price rises in BR - Center for Advanced Studies on Applied Economics

October 10, 2022 0 Comments

Opposite to soybean and oil, soybean meal price rises in BR - Center for Advanced Studies on Applied Economics

Cepea, October 4th, 2022 – Soybean meal prices ended the month of September on the rise in Brazil, despite the devaluation of the product in the United States and of soybean in the domestic market. The boost came from both firm demand in the Brazilian market and expectations for shipments to Asia from October onwards – in July, China opened its market to the Brazilian soybean meal, since the country aims to replenish and expend its swine herd. Thus, trading companies have been signaling the possibility of exports to China this month.

Besides, the supply of soybean meal from Argentina may decrease from October onwards, since the special currency exchange rate to encourage exports (from early September) ended in the country on Sept. 30th, and that context may discourage international sales.

Data from Cepea show that the regional prices for soybean meal have been higher than the export parity. At the port of Paranaguá (PR), the FOB prices for soybean meal were calculated at BRL 2,563.63/ton for shipment in Oct/22, while the deals closed in the national spot market have been higher than BRL 2,600.00/ton in São Paulo State and BRL 2,700.00/ton in Paraná.

On the average of the regions surveyed by Cepea, meal prices rose by 2.6% between Sept. 22-29. From August to September 29th, the monthly average increased by 1.4%. It is important to highlight that the monthly averages for soybean meal have been setting nominal records in Campinas (SP), Mogiana (SP), Northern Paraná and Chapecó (SC) since April. In Western and Southwestern PR, Ponta Grossa (PR), Rio Verde (GO), Rondonópolis (MT) and the Triângulo Mineiro (MG), the averages in September are the highest since March. It is important to consider that, by the end of the first quarter of 2022, the soybean crop failure in South America was being confirmed, and the exports from Argentina had been halted.

Considering the prices for soybean, meal and oil in SP, the share of meal in the industries’ profit margin surpassed 65% in late September, the highest since March 2021. Still, the “crush margin” decreased by 18.79% between Sept. 22-29, influenced by the steep devaluation of soy oil.

SOY OIL – Currently with the lowest share in the industries’ profit margin in the last 18 months, liquidity has been low in the Brazilian market of soy oil. Some processors have even anticipated maintenance, aiming to reduce supply and limit price drops, which have been influenced by lower demand from abroad and in Brazil (majorly for biodiesel).

SOYBEAN – The harvesting of soybean crops is advancing in the USA, and rains in South America are making agents optimistic about the 2022/23 season. This scenario is drove purchasers away from the market in late September. As for sellers, many of them were trying not to sell large amounts, which, linked to the dollar appreciation against the Real, limited devaluations in Brazil.

Between August 31st and September 30th, the ESALQ/BM&FBovespa Index Paranaguá (PR) dropped by 1.1%, to BRL 188.83 (USD 35.10) per 60-kilo bag on Sept. 30th. The CEPEA/ESALQ Index Paraná decreased by 0.96%, closing at BRL 181.70 (USD 33.78)/60-kilo bag.


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