For this week, the market must be attentive to the Chinese demand for soy from the United States. The climate should also be a factor of attention both for North American crops and for the evolution of the planting of the new crop in Brazil
Follow below the facts that should deserve the attention of the soy market next week. The tips are from Safras Consultoria analyst, Luiz Fernando Roque.
- The soybean market continues to focus attention on Chinese demand for soy from the United States, on the climate for the harvest of the new North American crop and on the climate for the evolution of the planting of the new Brazilian crop;
- After a few days without announcing US soybean sales to China, new sales were reported again this past week. According to Safras, there are no specific reasons for China to stop buying soybeans from the USA in the coming weeks, as Brazil has virtually no product to offer to the international market until the next harvest. The resumption of Chinese purchases is a positive factor for Chicago, providing support for future contracts;
- On the supply side, the strong evolution of the harvesting work of the new North American harvest weighs on Chicago. With more than half the area already harvested, the pace remains well above the normal average. The climate remains favorable for the evolution of the machines. This prevents higher valuations in Chicago, serving as a limiting factor;
- In Brazil, the dry climate has delayed planting work for the new crop, raising concerns. Gradually, this factor starts to reflect in Chicago, weighing positively on the contracts. The rains expected over the next few days over the states of the central strip of the country are expected to be very favorable for soils, which may encourage producers to move forward with the work. It is too early to talk about a decrease in area or production losses, but the warning about the Brazilian harvest is on.