Wedoany.com Report-May 30, Brazil’s soybean market experienced a volatile week in May 2025, driven by fluctuations in CBOT prices and the Brazilian real, though premiums remained stable. Significant trading volumes were recorded, with farmers actively selling last week, particularly on May 23, when a surge in the dollar followed government adjustments to the Tax on Financial Operations, creating favorable pricing opportunities.

Analysts from Brazil’s agricultural cooperative Copagril noted: “The market saw active farmer participation, with sellers capitalizing on a well-defined price range.” Sell spreads tightened as producers anticipated stronger short-term demand for corn and soybeans. In Chicago, futures contracts were supported by stable FOB premiums, reaching 0.80 cents for August, despite a volatile market influenced by robust U.S. planting progress and favorable weather. However, forecasts of heavy Midwest rains in the coming weeks could impact yields.

The U.S. soybean market faces tighter 2025/26 ending stocks due to reduced planting area and increased crushing, but sustained export demand, particularly from China, is critical to maintaining tight stocks. Copagril analysts stated: “A tight stock scenario depends on strong U.S. exports, especially to China, following recent positive trade developments.” Weather remains a key factor, as a smaller planted area requires high yields to meet production goals, potentially supporting price increases if conditions deteriorate.

In Brazil, high premiums may soften due to seasonal trends, with shipping volumes expected to decline after June. If China opts for U.S. soybeans from the new crop, available between October and November, Brazilian premiums could face further pressure, unless U.S. weather disrupts supply. Argentina’s improved crop outlook for 2025 adds competition. The dollar’s rise could bolster Brazilian prices, but a stronger currency might paradoxically lower premiums due to ample domestic soybean supply.

Brazil’s fiscal challenges, marked by a BRL 71.6 billion nominal deficit in March 2025 despite a BRL 3.6 billion primary surplus, continue to influence the exchange rate. Copagril’s report highlighted: “Fiscal risks, driven by high debt interest costs, weigh on the real, impacting price formation.” The market remains focused on balancing domestic supply and global demand, supporting Brazil’s agricultural exports without affecting local consumption.