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Writer's pictureEmily A. Vieira

Soybean Market Update: A nearly 3% surge in oil prices in Chicago creates opportunities for grain futures to climb over 1%.




Oil futures surged almost 3% on the Chicago Stock Exchange on Monday, driving gains of more than 1% in soybean grain prices. Notably, May closed with a 2.9% increase at 49.01 cents per pound, while July saw a 2.8% rise to 49.56 cents per pound.


Meanwhile, soybean futures saw modest gains ranging from 10 to 15 points, with May quoted at US$12.07 and August at US$12.17 per bushel. Soybean meal prices also saw an uptick, with the most traded position, May/24, reaching US$340.90 per short ton, an increase of 0.53%. Other contracts rose between 0.1% and 0.4%.


Market analyst Eduardo Vanin from Agrinvest Commodities noted the disparity between palm oil and soybean oil prices, highlighting the latter's relatively low cost compared to palm oil in Asia. He attributed this to smaller supplies of soybean oil and reduced supplies of palm oil, with only sunflower oil showing signs of recovery.


Palm oil futures rose on Monday, prompting gains in soybean oil as part of a recovery from declines and profit-taking seen on Friday. The appreciation of soybean oil in March, nearly 8% according to Agrinvest data, was supported by palm oil's advance.


Concerns over the availability of vegetable oil in Indonesia due to declining exports in January and February also contributed to the uptrend in soybean prices. Additionally, a cut of two million tons in Conab's projection for the Brazilian soybean harvest at the beginning of March, coupled with adverse weather conditions in Argentina, fueled market activity.


Despite these factors, demand remains subdued, limiting potential price increases. International demand remains focused on Brazilian soybeans for now.


Traders are also awaiting new USDA reports on the 2024/25 harvest area, with expectations that soybean acreage may not increase as much as initially anticipated.


The drop in the dollar against the real stimulated soybean prices on the Chicago Stock Exchange. In Brazil, however, this drop was offset by increases in Chicago, leading to good deals recorded at the beginning of the week.


In the Brazilian market, soybean prices ranged from R$108.00 to R$117.00 per bag, depending on the region. In ports, prices reached R$126.00 in spot and R$131.00 in July at Rio Grande. Interest in the June position was notable, with prices around R$130.00.


Overall, mid-year positions offered better returns, according to Vlamir Brandalizze from Brandalizze Consulting.

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