Brazil's soymeal prices increase on strong demand

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Publish time: 6th December, 2013      Source: www.cnchemicals.com
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December 6, 2013

   

   

Brazil''s soymeal prices increase on strong demand

   

   

   

Despite the good supply from the US and perspectives of a large crop in South America, soymeal prices in the domestic and international markets were moving up in late November.

   

   

This is according to Comprehensive Economic Partnership for East Asia (CEPEA), the research centre linked to University of São Paulo.

   

   

In the international market, the soymeal valuation is a result of a higher demand. In Brazil, low processing activities and the demand increase continue to push up by-products prices. Prices rises for the soymeal, in turn, have underpinned domestic quotes of soy.

   


Asia is currently the world''s major demander of soy, while the EU is the major destination for the soymeal. According to the USDA, China may increase purchases of the grain by 15.3% in the 2013-14 season, which means almost 10 million tonnes more compared to the previous crop, at 69 million tonnes. The EU may import 16.2% more soymeal, to 20.1 million tonnes.

   


Soymeal and oil quotes have significantly affected soy prices. Considering first due dates at Chicago Mercantile Exchange/Chicago Board of Trade (CME/CBOT), from the total revenue obtained with processing activities of one soy tonne, roughly 70% comes from the soymeal and the other 30%, soyoil. The soymeal share, in turn, is one of the highest in history, and soyoil, consequently, the smallest, according to CEPEA data. This scenario indicates that the industry would have recovered profits over the last two months.

   


Abiove (Brazilian Association of Vegetable Oil Industries) data indicate that, from January to September, only 22.3 million tonnes of soy were processed in Brazil, still the smallest volume since 2006.

   


Brazil''s crop development continued satisfactory at the end of the month, and producers were expecting that the planting activities in the desirable period may push up yield. Producers in Bahia, Mato Grosso, Goiás and part of Minas Gerais are free to use pesticides against Helicoverpa armigera caterpillar.

   


The ESALQ/BM&FBovespa Index for the soy delivered at the Paranaguá port rose 3% from October 31 to November 29, and closed at BRL77.25 (US$33.07) per 60-kilogramme bag on November 29. In the same period, the CEPEA/ESALQ Index for soy (Paraná state- reference for trades in Brazil), increased 3.2% and closed at BRL75.63 (US$32.38) per 60-kilogramme bag on November 29.