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Weakened soybean meal demand pressures prices in Brazil

Updated Mar 27, 2023
A large part of domestic consumers of soybean meal was absent from acquisitions in the first half of March. Many of them purchased volumes for short-term consumption and are waiting for a greater supply of derivatives to close new deals. These agents expect lower prices in the second half of March, based on expectations of a record 2022/23 soybean crop in Brazil. Among the regions monitored by Cepea, soybean meal prices dropped by 2.6% between the average of February and the first half of March and 4.7% in one year. Specifically in the region of Campinas (SP), the price returned to the levels negotiated in Oct/22. Another low factor is that, with the increase in the supply of raw material, the USDA estimates record production of soybean meal in Brazil, of 40.87 million tons this season. However, sales should also be record: 21.1 million tons are estimated to be exported and 19.85 million tons can be consumed domestically.
The projections for an increase in soybean meal negotiations in Brazil are due to the lower supply in Argentina (the main global exporter of this derivative). According to the USDA, the derivative production in the neighboring country must total 27.49 million tons, 9.2% below the verified in the previous harvest. Of this total, ...
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