Anice
surprise
The final economic result of the 2015/16
soybean growing season, “in general terms,
ended up with a positive surprise”, says Ar-
gemiro Luís Brum, professor of economics
at the Regional University of the Northwest
in Rio Grande do Sul (Unijuí), agricultural
market analyst and consultant. “So much
so that, in real gains, January through July
2016, the soybean crop yielded, on nation-
al average, 2.65%, surpassing gold, com-
mercial and blackmarket dollar, savings ac-
countsandcertificateof deposit –CDPre (30
days), losing only to BM&F (Stock Exchange
in São Paulo)”, argues the professor.
Braziliancropsomewhatsmallerthanini-
tially projected and important recovery mo-
ments of theChicagopricecharts andquotes,
stemming from strong speculation about the
weather conditions in the United States, were
responsible for keeping the price of a sack of
the oilseed at R$ 70 in South Brazil, and very
closetoitinallotherregions,theanalystcom-
ments. He recalls that, in June 2016, prices in
Chicago reached upwards of US$ 11.50/bush-
el, while from August 2015 to April 2016 they
stagnated at US$ 8.50 and 9.50. At that time,
domestic prices of soybean/delivery reached
upwardsofR$84intheSouthandclosetoR$
80 in all other regions, creating speculations
of priceshitting theR$100mark.
The price hikes occurred in spite of the ev-
er-rising value of the real (close to 25% from
January through August 2016), the professor
observes. Therefore, he concludes, about
the past season, that “soybean prices were
verygood,makingupforthehighproduction
costs and leading the supply chain to reap
reasonably good results”. As an exception,
he says that “some regions in the Country
did not reach this price level because of bad
weather conditions, which is the case of Rio
Grande do Sul, with excessive rainfall, while
MatoGrossoandsurroundingregionswereaf-
fectedbydroughtconditions”.
Still about expenses on the production of
soybeans, the Center for Applied Studies on
Advanced Economics (Cepea), of the Univer-
sity of São Paulo (USP), ascertained increas-
es ranging from7.6%to16.5%in theEffective
OperationalCost(EOC)insixregionslocatedin
theCerradoandSouthBrazil, inacomparison
between the first semestersof 2015and2016.
On the other hand, the organ ascertained Re-
turns on Operational Costs (RRCO, in the Por-
tuguese acronym) from 28.5% to 98.5%. In
values spent, they were more representative
than theprices of fungicides, insecticides and,
in some areas, herbicides. In a longer period
(2007/08 to 2015/16), the National Food Sup-
ply Agency (Conab) concluded that the share
of the pesticides in the costs reached 18.2%,
whilefertilizersreached27.8%.
New scenarios
For the 2016/17 soybean growing season, the picture with regard to financial gains
“seems to change a lot”, in the initial appreciation of Argemiro Luís Brum, on 15th Sep-
tember 2016. “Chicago, in light of a record crop in the United States, tends to stabilize
between US$ 8.50 to 9.50, while the Exchange Rate is strongly pointing to a stable rate
from R$ 3.20 to 3.30, when the production costs were reckoned on the basis of a higher
exchange rate”, says the analyst. Furthermore, he spots chances for the effects of the La
Niña to affect the fields, reducing average productivity rates.
Taking the State of Rio Grande do Sul as reference, the consultant points to some
possible scenarios. If the Exchange Rate remains at about R$ 3.20 to the dollar, he thinks
that, in Rio Grande do Sul, at delivery, soybean could fetch from R$ 53 to R$ 60 per sack.
“Should the present Brazilian government prove unable to implement the necessary cor-
rections to the economy, the Exchange Ratemight again stabilize at R$ 3.50 (or even high-
er), a fact that would keep soybean prices at R$ 58 to R$ 65 per sack”, Brum speculated in
mid-September 2016, when average prices inRioGrande do Sul reached R$ 70.4 per sack.
In Mato Grosso, at that time and in the same manner, the Mato Grosso State Institute of
agricultural Economy (Imea) anticipated smaller profit levels in the coming crop.
Sílvio Ávila
Favorablepricesmakeupforhighproductioncosts
andinducetheBraziliansoybeansupplychaintoreap
reasonablefinal results inthe2015/16growingseason
The kernel’s profitability picture for the
newseason could change considerably
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