Soybean products, corn prices edge lower in Brazil's Mato Grosso: IMEA
Prices of soybean products and corn face downward pressure in Brazil’s main agricultural-producing state, Mato Grosso, the state’s agriculture institute IMEA said in its weekly bulletin late Monday, amid looming global oversupply and poor demand in the oilseed sector.
Soymeal and soyoil prices in the state edged 0.7% and 0.6% lower on the week, respectively, with the former struggling with lackluster demand while the latter borrowed weakness from falling futures in Chicago.
“According to IMEA’s on-the-ground sources, [soymeal] sales are restricted to small volumes, indicating low demand for the product,” the institute said, adding that low cattle prices are contributing to this outlook.
The agency said that the Brazilian market is not demanding larger soyoil volumes despite the increase in the biodiesel mandate from 12% (B12) to 14% (B14) enforced at the beginning of March.
Market sources told AgriCensus, however, the domestic demand for soyoil has increased since the end of last year, with crushers anticipating the increase in the mandate.
“The demand for soyoil has increased and that is why [the domestic industry] is paying a 3.0 c/lb premium above the export parity price,” a Brazilian analyst said.
According to AgriCensus’ price assessments, since the end of November front-month FOB soyoil premiums in Brazil have been oscillating between being assessed at parity with Argentine volumes and trading at a premium to the letter.
This has been the case even though Argentina has been struggling with the lack of soybean availability, which jeopardizes its price competitiveness across the bean complex.
On top of these price dynamics, sources have been telling AgriCensus that Brazilian export indications have been mostly nominal over the past couple of months as the domestic market has been consistently outbidding the export market.
Corn
The agency said that corn prices would continue to edge lower in Mato Grosso, although at this time of the year prices tend to pick up before new crop volumes are available.
“This decline [in prices] is linked to a larger availability of corn in the domestic market due to the larger offer in the 2022/23 season coupled with the low pace of farmer sales, which continue to lag compared with the previous year,” IMEA said.
IMEA revised its 2023/24 supply and demand estimates from February figures, with a 1.3% uplift in supply due to higher beginning stocks.
Demand estimates were kept unchanged with exports pegged at 26 million mt, domestic consumption at 14.7 million mt and interstate demand at 4.5 million mt.