Commodities Shuttle: Falling Dollar Relieves Agricultural Products After a Month of War in Ukraine

A month after the beginning of the war, the prices of agricultural products, although still high, are accommodated in the domestic market. On the other hand, volatility persists, with the Chicago Stock Exchange recording record values.

Soy is one such example. In the North American market, the oilseed exceeds US$ 17 per bushel (27.2 kg), but in Brazil, even with the accelerated pace of exports, the sack fell to R$ 197 at the port of Paranaguá this Thursday ( 24).

Two weeks ago it was at R$207, according to Cepea (Center for Advanced Studies in Applied Economics).

The lower pressure of prices in the domestic market is due to the fall of the dollar which, this Thursday, was R$ 4.83. The loss of strength of the US currency softens the price increases that occurred on the Chicago Stock Exchange.

A month after the start of the war, however, the most affected products, due to the importance of the two countries involved in the conflict, maintain prices on the domestic market higher, in relation to the values ​​of a month ago.

Wheat, which already came with readjustments last year, is at R$ 1,900 per ton, according to Cepea, above the R$ 1,720 of a month ago.

The cereal, with prices close to US$ 11 per bushel in the international market, reaches Brazil at R$ 2,200 per ton, according to Vlamir Brandalizze, from Brandalizze Consulting. At this price, it is difficult for the industry to pass on new costs to retail, due to the loss of consumer income.

The wheat currently being traded by the mills was purchased for R$1,500 per ton. It is difficult to replace this difference, according to the analyst.

This price is also supported by good Brazilian exports. Until the third week of March, foreign sales of wheat already total 2.2 million tons this year.

Corn, which also has high prices in Chicago, is losing strength in Brazil. The bag is being negotiated, on average, at R$ 99, according to Cepea. Although falling, due to the good progress of planting the safrinha, current prices are still higher than at the beginning of the war.

The world supply of corn will be smaller this year, due to difficulties in Ukraine in carrying out the current planting. The country is one of the main exporting countries,

The rice and beans tripe has stable prices, but this scenario could change. The cereal is in the final stage of harvest, with prices of R$ 77 per bag in Rio Grande do Sul. Markets conquered in recent years can be attractive for Brazilian exports.

Beans, on the other hand, whose crops are developing well, are threatened by frost. If that happens, there will be new pressure on prices, which are between R$280 to R$300 per bag, according to Brandalizze.