Prices keep escalating in physical soybean market

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     Porto Alegre, October 26, 2020 – The lack of soybeans in the physical market keeps prices with a bullish trend in the main trading regions of the country. With Chicago, premiums, and the dollar at firm levels, a 60-kilogram bag showed indications above BRL 170.00 in some regions last week.

     Well capitalized, growers left the market and practically stopped the trading. The market’s focus is on planting the new crop, which is still late. Rain is back, but its coverage has not yet been uniform. There has been considerable progress in some areas, but in general good volumes of precipitation are still needed to bring soil moisture back to normal.

     The planting delay in Brazil helps support future quotes on the Chicago Board of Trade. Last week, contracts maturing in November reached USD 10.85 a bushel, the highest level in four years.

     The firm demand for U.S. soybeans, mainly by China, is another supporting factor for foreign prices, and the trend is for expansion of the Asian purchasing window in the United States.

     Complementing the favorable scenario for prices in Brazil, the dollar continues prompting support, at around BRL 5.60, still amid the risk aversion climate for the global economy. Export premiums also rose, staying 300 points above Chicago.

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