Soy Market: Overview of the week - 03/02/2023

The soybean market opened the week this Monday (30/01) with good gains, with gains of up to 30 points in the main maturities. In addition to grain, increases also occurred for its derivatives, increasing more than 1,4%, both for oil and bran. Tuesday (31st) started with falls and there was a correction throughout the day that ended without variations, probably due to the lack of information in the market to boost prices either up or down. Throughout Wednesday (01), the grain showed significant losses ranging up to 24 points, this drop was possibly due to soybean oil futures falling more than 3% after the US announced a higher-than-expected oil supply. , gasoline and diesel. On Thursday (02) the market returned to operating in positive fields, but with timid increases and during this Friday (03) there were still no significant variations, prices continue to record small gains, but traders continue to wait for the next news .

The main news that moved the soybean market during the week continued to be the weather in South America, where climate models point to predominantly dry weather for Argentina and much of southern Brazil. These adverse weather conditions have possibly supported prices, combined with the fact that there is still little supply in Brazil and the USA. As the harvest movement in Brazil advances and the supply of soybeans on the market increases, prices should fall, potentially putting pressure on prices.

Another important factor to pay attention to is Chinese demand after the Lunar New Year holiday, as the return of this holiday begins with better prospects, as the Asian nation once again considers reopening its economy. In addition to no longer having a ''zero-Covid'' policy in the country.

Asian rust

The month of January is already characteristic of appearances of Asian rust in some parts of Brazil, however this harvest has seen rapid increases in cases of the disease. Approximately 160 reports of the disease have been made in 9 Brazilian states, most of the cases in commercial crops in the grain filling phase. At the same time, last harvest, there were only 88 reports, however, the weather conditions were different.

Given this, later crops will need more fungicide applications, as there is high damage to crops in the vegetative, flowering and pod formation stages.

All of this causes the costs of the 22/23 harvest, which was already considered more expensive than the previous one, to increase by almost 10% due to the need for more spraying.