CEPEA: CEPEA/ESALQ Index for soy in Brazilian state of Paraná drops 2.9% in March, closing at 57.54 reais/60-kilo bag on March 28

Nevin Barich

PIRACICABA, Brazil , April 4, 2013 (press release) – The beginning of the harvesting in Argentina (reached 5% of the total area until late March – Bolsa de Cereales/Buenos Aires data), and logistics hindrances at Brazilian ports support expectations that Argentina may export more than 11 million tons forecast by the USDA for the 2012/13 crop year. Shipments from Argentina may also step up due to the cancelling of Chinese purchases from Brazil.

Meanwhile, prices of soybean by-products and export premiums continued to press down soybean quotes in Brazil – price drops have already surpassed 20% in the accumulated of the year (until late March). Still, prices were around 10% higher in relation to the same period in 2012, on the average of regions surveyed by Cepea.

The bottleneck at Brazilian ports will spread shipments along the year, as opposed to concentrating only in the first semester, similar to the scenario in 2012.

The USDA forecasts the Brazilian production for 83.5 million tons and the domestic consumption, for 36.9 million tons. Therefore, 46.6 million tons are expected be shipped.

For Argentina, the USDA estimates a production of 51.5 million tons. Conversely, Bolsa de Cereales forecasts 48.5 million tons and a consumption of 36 million tons from the industry. The surplus in Argentina would total 15.5 million tons and approximately 11 million tons are to be exported (USDA data). However, Argentina may take advantage of difficulties at Brazilian ports.

On the other hand, despite possible cancellations of Brazilian soybean sales, players say that trades in Brazil were heading to the normality in late March. Freight values were decreasing in the period, export premiums were becoming slightly higher, reflecting the good international demand. Thus, prices in Brazil continued to move down because of producers’ willingness to trade and storage difficulties.

The CEPEA/ESALQ Index for soy (Paraná state – reference for trades in Brazil) dropped 2.87% in the accumulated of March, closing at 57.54 reais or 28.46 dollars per 60-kilo bag on March 28. The ESALQ/BM&FBovespa Index for the product delivered at the Paranaguá port downed 0.8% in the same period, and closed at 62.00 reais or 30.66 dollars per 60-kilo bag. (Cepea – Brazil)

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