CEPEA: ESALQ/BM&FBovespa Index for soybeans up 1.4% in April to 71.46 reais/60-kg bag; CEPEA/ESALQ Index for soybeans up 2.8% to 69.11 reais/60-kg bag
May 7, 2014
– The demand continues to keep the upward trend for soybean meal and grain prices in both the domestic and international markets. Soybean meal consumers in world terms seem to be willing to buy, accepting higher quotes of this by-product. As a result, processing activities of the grain also increased. Therefore, the scenario for sellers is not better because soybean oil prices have been pressed down by the higher volume of palm oil in stocks.
At CME Group, average quotes for soybean grain in April, considering the first due date, reached the highest value since July 2013. As for soybean meal, the monthly average was the highest since September 2012. In relation to soybean oil, the average was the highest since September 2013.
As a result, soybean grain quotes are underpinned by soybean meal rises. Considering data from April 30 of futures contracts at CME Group and an industrial yield for each ton of soybean grain of 78% of soybean meal and 19% of soybean oil, from the total revenue of the industry, 71% would come from the soybean meal and 29%, of the soybean oil. These are record values. In late April 2013, the relation was 64% of the revenue coming from soybean meal and 36%, of the soybean oil.
Concerning international trades, soy grains and soybean meal shipments from the United States are at a growing and record pace. Until mid-April, the US exported roughly 42 million tons of the grain, against slightly more than 36 million tons in 2012/13. As for the soybean meal, shipments already surpassed 7.6 million tons, 6% more than the volume shipped in the same period of the crop before. Referring soybean oil exports, the volume is at 550 thousand tons, 27% lower than in the same period of 2012/13.
While the demand for soybean grain and meal comes from China, pressures on sales and soybean oil prices are related to both higher production and ending stocks of palm oil. Between 2009/10 and 2013/14 crops, the production of palm oil rose 27%, while the soybean oil production increased 15%. However, the demand for palm oil has not increased in the same intensity, leading ending stocks to move up 38% in the period, representing 13% of the demand. As for soybean oil, ending stocks reduced almost 4% between 2009/10 and 2013/14 crops and account only for 7.3% of the demand.
Now, for the domestic market, players are focused on prices in the upcoming months. Producers indicate that sales stepped up, but the supply might be smaller than that estimated officially. In Mato Grosso, Imea points to 71% of the production of the state already traded, while in Paraná, Deab/Seral indicates that 53% have already been traded.
The ESALQ/BM&FBovespa Index for the soybean delivered at the Paranaguá port moved up 1.36% in April, closing at 71.46 reais (31.99 dollars) per 60-kilo bag on April 30.
As for the CEPEA/ESALQ Index for soybean (Paraná state – reference for trades in Brazil), the increase in the accumulated of the month is 2.78%, closing at 69.11 reais (30.94 dollars) per 60-kilo bag in the last day of April. (Cepea – Brazil)