Sales are anticipated and soybean prices reach records in 2020

As a large part of the 2019/20 harvest had already been negotiated in advance (still in 2019), Brazilian soybean farmers began 2020 with resistance to sales involving large lots, aimed at fulfilling contracts. The delay in the harvest also brought uncertainty regarding the volume to be produced, which, in the end, was a record, 124,8 million tons, according to Conab.

From the second two months of the year onwards, the dollar began to operate above R$5,00, which intensified the dispute between domestic and foreign soybean buyers. On the domestic demand side, Brazilian industries acquired greater volumes, in order to meet the heated demand for derivatives. Furthermore, at that time, exports of soybean meal and oil were favored by the lower supply in Argentina.

In the second quarter, Brazilian exports intensified, as China demanded record volumes of soybeans. In the last semester, with the low surplus and record prices, Brazilian soybeans began to become less attractive to importers.

Thus, international buyers turned to US product. From then on, the little volume offered in Brazil was competed for by local industries, which offered prices above export parity, something atypical.

This context caused record prices to be renewed month after month and encouraged agents to negotiate the production of the next two harvests – with 2022 still in its infancy.