Soybeans: Chicago closes in the red with US weather and American logistics…

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Aware of the logistical problems caused by the passage of hurricane Ida in the state of Louisiana, in the United States, China bought a soybean ship from Brazil for shipment in October, according to Agrinvest Commodities, reported to Notícias Agrícolas. Traders reported trades on the basis – cost and freight China – at 382 cents above the values ​​traded on the Chicago Board of Trade.

Stronger demand, despite being punctual for the moment, weighed on soybean prices on the Chicago Board of Trade, along with other factors – such as the favorable climate for the conclusion of the American harvest and the proximity of the beginning of the harvest – and the market International once again closed in the red, with losses of 6 to 10.75 points among the most traded contracts. Thus, November/21 ended the day with US$ 12.92 and May/22, US$ 13.10 per bushel.

Likewise, the dollar fell back against the real, closed at R$5.17, hit the low of the month during the session, and helped put pressure on soybean indicators in the domestic market. Losses in the interior of the country reached up to 2.50%, as was the case with Luís Eduardo Magalhães, in Bahia, taking the bag to R$ 156.00. In ports, stability for the new crop, retreat for available soybeans.

The new business, therefore, remains punctual, mainly in light of the lows observed at the beginning of this week, which continue the movement of pressure felt by the oilseed in the domestic market in recent days. In some squares, the sack of soybeans lost more than R$ 10.00.


In addition to seasonality and the pressure exerted by the harvest, which is approaching the US, such logistical problems also weigh on prices.

“As trading companies are no longer selling because of all these adversities, China bought soybeans in Brazil even though it is much more expensive. This means that the US has already lost September shipments to Brazil and may also lose October, depending on how long it will lead to the resumption of operations there,” explains Eduardo Vanin, market analyst at Agrinvest Commodities.


“Despite being more expensive, China opted for the purchase of Brazilian soybeans due to the logistical problems faced by the terminals on the Mississippi River”, explains the market analyst at Agrinvest, Marcos Araújo.

Upon arriving in New Orleans, the Ida – now classified as a tropical storm again – the weather compromised Cargill’s grain lifting terminal from barges to ships and, according to sources heard by the consultancy, the resumption of normality for the operations can take time. According to a spokesman for the trading company, which is one of the largest in the world, he informed that the damages are significant and that there is no date to resume work at the plant in question.

“This area in southeast Louisiana still faces significant personal safety issues and power outages, so we can just begin to assess the storm’s impact on the river system. We currently don’t have a deadline for resuming operations,” the report said. statement from Cargill.

Images from Cargill’s terminal after the Ida circulated Twitter and show the extent of the damage:


Cargill 2

Cargill 3
Photos: Twitter/@CJSwish4

“The flow of grains through NOLA is interrupted, a flow that represents 60% of the national grain export capacity”, says the Agrinvest team. “Meanwhile, the American grain will be dammed, impacting its export program, which will begin to gain strength as of October. In relation to soybeans, if the flow problem takes too long to be equalized, it will force buyers to seek other sources, favoring Brazil “.

The United States is now more competitive in both soybean and corn exports than Brazil and Argentina. However, after the problems caused by the hurricane, the gap between the two main origins narrowed, as shown in the graph below, from Bloomberg.

Bloomberg Chart - Corn BR USA ARG
Chart – Bloomberg

The concerns of the market and of rural producers were intensified by the damage caused in one of the busiest grain export terminals in the US, also due to the proximity of the harvest in the country. It is precisely in the Mississippi Delta region where field work is started, where there are already crops ready to be harvested and where the first harvesting activities begin to be registered.

According to information from Bloomberg, in addition to Cargill, the teams of Archer-Daniels-Midland Co. and Bunge Ltd are also already evaluating possible damage they may have suffered in grain elevators and port terminals. Thus, according to the international news agency, ADM has already stated that it will reopen four elevators in New Orleans that were closed over the weekend and that Bunge has closed a soy processing plant in the state of Louisiana.