Soy begins lights week in Chicago and dollar focus on brazilian market

Posted by Marina
The week begins with soaring soybean prices on the Chicago Stock Exchange. Commodity futures, around 6:45 am (GMT), were up between 3.50 and 4.50 points on Monday. Thus, the January contract was quoted at $ 9.00, while the May contract was $ 9.29 per bushel.

The market recovers some of last week's casualties but remains defensive waiting for strong and consistent news. Prices are seeking to rebound after hitting a lows of eight weeks - last Friday (22) - and the trade war is at the center of the discussions, bringing much uncertainty to the course of business.

According to the latest reports, an agreement between the two countries would be "fairly close," according to US President Donald Trump, while negotiations still bump into thorny issues for both countries such as technology and intellectual property.

US National Security Advisor Robert O'Brien said on Saturday that an initial trade deal with China is still possible by the end of the year, but warned that Washington would not close its eyes to what is happening in Hong Kong. ", Reuters reported on Monday.

At the same time, traders are still following all the news related to the completion of the new US grain crop and are looking forward to the new weekly US Department of Agriculture (USDA) crop monitoring bulletin on Monday after the market closes. . Last week, the soybean harvest was already completed in 91% of the area.

At the other end, attention to the development of the season in South America, with the market following the soybean planting in Brazil, Argentina and Paraguay. Field work is advanced in Brazil and weather conditions are beginning to regularize. Still, some regions still suffer from a lack of rainfall or a smaller range of precipitation, causing serious problems.

Leading the field work are the states of Mato Grosso and Paraná, as traditionally happens, where more than 90% of oilseed sowing is completed.

"Brazil's 2019/20 harvest continues with a projected area of ​​just over 37.4 million hectares compared to 36.4 million last year. The climate is gradually normalizing, keeping the harvesting potential above 122 million tons compared to 115.5 million harvested this year, "says Vlamir Brandalizze, market consultant at Brandalizze Consulting.


The new week for business in Brazil, according to Brandalizze, begins with the focus of dollar-focused producers and traders. The exchange rate, in recent days, has been one of the main legs of price formation here in the domestic market and should still have a lot of volatility, therefore, a lot of attention.

In addition, some dispute still between the domestic market and exportation also contributes. About 35% of the new crop is already traded, while of the old crop there is almost no more soy to be traded.

"The market should keep an eye on the dollar, which will continue to be the support factor for the callsigns, with great chances of maintenance and even slight positive pressure for the grain that goes to domestic demand. After all, industries should come to the field. supply, but the ports will continue to stand firm in the wake of the US-China trade war. The dispute between Chinese and Americans is likely to maintain a good presence of buyers in Brazilian ports and so, as we are at the peak of the off season and there is little soy to be negotiated, there is an appeal for maintenance and even some positive adjustments ", explains Brandalizze.

Source: Agricultural News