Brazil: Drop in external soybean prices and accelerated harvest pace put pressure on the domestic market

The price of the first-month soybean contract in Chicago fell by 6.2% in January, to USD 12.29/bu. In 2024, domestic soybean prices have already fallen by around R$24/bag, or 20%, with prices in Sorriso (MT) below R$100/bag. The soybean harvest in Brazil is ahead of the previous harvest, with a very fast pace in the Southeast states and Paraná. In February, the additional price devaluation was 4.6%, averaging USD 11.72/bu. With a more favorable climate pattern for some producing regions in Brazil, the expectation is that production in Argentina and Paraguay will more than compensate for the Brazilian drop. Furthermore, slower demand from China helps justify the movement. Domestic prices continue to be pressured by external devaluations and falls in export premiums, with domestic supply increasing and demand still reduced. As a result, prices reached the lowest level recorded since July 2020. As of February 24, 38% of the crop had been harvested, 4 p.p. ahead of the same period ...