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October 8, 2020

Soy Prices at Port of Paranagua in Southern Brazil hit Record Highs

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Prices for soybeans in Brazil continue to surge higher as tight supplies shrink even further. The price of soybeans at the Port of Paranagua last Monday hit R$ 156.02 per sack (approximately $12.85 per bushel), which surpassed the previous record of R$ 153.40 per sack (approximately $12.65 per bushel) set on August 31, 2012.

The value of soybeans in Parana has increased 80% over the past 12 months thanks to a strong demand during the first half of 2020 from exporters and domestic processors. Brazilian soybeans were very competitive in the world market during the first half of 2020 thanks to an approximate 35% devaluation of the Brazilian currency.

End users in southern Brazil are worried that these very high prices could continue on into 2021 because farmers have already forward contracted a lot of their anticipated production and they will be cautious seller going forward due to potential dry weather concerns. The delayed soybean planting will also delay the soybean harvest in January when normally there are good volumes of new crop soybeans coming onto the market.

Soybean oil prices in Brazil are high as well due to increased demand for soybean oil to blend into biodiesel. Soybean oil accounts for 80% of the vegetable oil used to make biodiesel fuel in Brazil. Soybean oil is being offered above R$ 7,000 per ton, which is the highest price since 2002.

The domestic prices for soybeans, soybean meal and soybean oil are expected to move even higher as dry weather disrupts the soybean planting in Brazil, which will eventually delay the soybean harvest as well early next year.