Soy: Overview of the week in the country - 17/12/22

Monday (12/12) began with a general drop in the prices of almost all commodities. Soybean meal futures also started the week falling sharply and helping to put pressure on the grain. In addition to monitoring the loss of other commodities, another factor in this pressure may be due to the incidence of some rainfall recorded in Argentina. Even though they were low in quantity and poorly distributed, this rainfall over the weekend was important for regions that were suffering greatly from the drought.

After ending Monday with a drop of more than 20 points, the soybean market began Tuesday (13/12) rising on the Chicago Stock Exchange. In addition to these increases also being recorded in oil and bran, which forces grain prices to rise, the USDA (United States Department of Agriculture) began Tuesday by publishing a new sale of 140 thousand tons for the 2023/24 harvest, which may have confirmed that throughout the day the market intensified its highs and approached US$ 15,00 per bushel. After ending Tuesday close to US$15,00 per bushel, the market operated on Wednesday, returning part of the gains recorded previously and operating the rest of the day with stability.

It is clear that the week has been quite volatile and very focused on the climate variations presented in South America, with a focus on Argentina. Traders remain attentive to weather forecasts, which show rain in the coming days.

During Thursday (15/12) the market continued to operate with stability. On Friday (16/12) the soybean market on the Chicago Stock Exchange showed slight drops and remained stable during the day.

The focus throughout the week remained the same: climate trends in South America, COVID containment measures in China and demand behavior. There is a need for new news to define its direction.

Production in Brazil

Mato Grosso will increase its 2022/23 harvest by 49,4% when compared to the 2021/22 harvest, becoming the largest state production of the oilseed. The good news is that crops have been developing well. According to the MT foundation, this year the crops showed a low incidence of diseases, with more than 20% of the crops moving into the reproductive phase.

In Paraná, the 2022/23 harvest presents the best evaluation compared to the last four years. When compared to 2021/22, a year of intense drought in the state, Paraná has the potential for increases of up to 70%. According to experts, the harvest is regular in relation to climatic conditions and plant development.

In Rio Grande do Sul, the hot and dry climate has been impacting the development conditions of soybean crops. In a large part of the State, the effects of La Niña drastically hampered the implementation and development of the crop, causing delays in planting and crop development.