Soybeans: High Supply Puts Pressure on Prices

Soybean prices have been falling over the past week. According to researchers from Cepea, the decline is mainly due to the high supply in South America's 2023/24 harvest and expectations for a large volume in the 2024/25 season in the Northern Hemisphere.

Due to these declines, Brazilian soybean producers have been hesitant to engage in large spot market transactions. They are also closely monitoring the strong currency volatility experienced in recent days, which could potentially encourage sales in the coming months.

In July, the average price of the ESALQ/BM&FBovespa – Paranaguá Index was R$ 138.09 per 60 kg sack, down 0.6% from the previous month and 9% lower than in July 2023, in real terms (adjusted for the IGP-DI of June 2024). For the CEPEA/ESALQ – Paraná Index, the prices fell by 0.4% month-on-month and 5.9% year-on-year, to R$ 133.07 per 60 kg sack.

Analysts suggest that the market may continue to face downward pressure if global supply trends persist. However, shifts in currency exchange rates and potential changes in international demand could provide some relief to prices in the near term.