Soybean oil futures followed the strong rise in energy matrices and rose more than 3% on the Chicago Stock Exchange this Tuesday (5). above 1% between the price of the grain in this trading session. The November contract closed the day at $12.50 and the May contract at $12.79 per bushel, up 14.75 and 14 points, respectively.
The strong pull in the energy market is mainly stimulated by an increase in demand – which occurs faster than estimated for the most severe post-peak period of the pandemic – and by a still restricted supply. In this session alone, natural gas rose almost 10%, as well as rose more than 1%, Brent oil vents and also WTI.
Among the other vegetable oils, the palm oil market stood out and led the rise, which renewed its historic highs this Tuesday. In addition to the stimulus coming from more expensive energies, problems in key production regions have also helped to catalyze the current moment.
“Oil at seven-year highs, highs in coal and gas, a drop in crushing in China, a cyclone in India and damage in soy-producing and oilseed regions, record Chinese and Indian oil imports and more canola crop failure in Europe and Canada”, as explained by Agrinvest Commodities, were some of the aligned reasons that drove oil gains today.
From the financial and expectations about US-China relations, stimulus also arrived.
“Agricultural markets are still digesting the speeches of Katherine Tai this Monday (04), who revealed ‘a strategic vision of the Biden government to realign trade policies in relation to China’, which must be increasingly pressured to comply with the terms negotiated in Phase 1 of the Agreement and other commercial intentions”, stated the general director of the Labhoro Group, Ginaldo de Sousa.
ON THE OTHER SIDE
The fundamentals are lining up and are already consolidating, according to analysts and market consultants, the downward trend for soybean prices. The improvement in the rhythm of Brazilian planting and the good advance of the American harvest put pressure on prices, as well as the momentary Chinese absence of purchases in the American market due to its golden week holiday.
The USDA (United States Department of Agriculture) brought its new weekly crop monitoring bulletin with the 2021/22 soybean harvest slightly above market expectations. Until last Sunday (3), 34% of the American area had already been harvested, against 32% of the average expected by traders, and 16% from the previous week. A year ago the percentage was 35% and the average of the last five years was 26%.
However, market consultant Aaron Edwards, from Roach Ag Marketing, reminds that these fundamentals are not yet completely defined – given all the development of the new Brazilian crop still ahead -, which may also affect the trajectory of quotations.
In Brazil, the dollar also rose again, however, the behavior of soybean prices in the available market was not regular and some markets even registered some lows. In ports, however, prices rose. In Paranaguá, R$ 172.00 in available and R$ 166.00 for the new crop, with respective increases of 0.58% and 0.61%. In Rio Grande, R$ 170.00 and R$ 164.00 per bag, increasing 0.59% and 0.61%.
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