South America Calling
Alastair Stewart South America Correspondent

Thursday 10/25/12

Brazilian Soy Market at Standstill

With farmers concentrating on planting, Brazil's soybean market remains dead despite a recovery in futures prices in Chicago during the last week.

The reasons for the lack of business are numerous.

Firstly, there simply isn't any old-crop soybeans left following a heavy drought in the south and aggressive export purchases in the first half of the year. According to Celeres, a local farm consultancy, some 99% of the 2011-12 has been sold, up from 94% last year and a six-year average of 86%. The lack of available beans will be reflected in extremely low carryover stocks, which Safras e Mercado, another consultancy, see falling from 2.9 million metric tons in 2011-12 to 343,000 mt in 2012-13.

Secondly, farmers have also sold an unprecedented 47% of their forecast 2012-13 crop, up from 31% last year, as they sought to take advantage of price peaks during the first seven months of the year. In the center-West, where forward sales are more prevalent, some 64% of the crop has been committed, up from 38% last year. With only 15% of the crop planted and rain still irregular in the center-West, farmers don't feel comfortable committing to sell any more produce.

Thirdly, local prices remain lower than a month before, despite Chicago's recent upturn. On Wednesday, soybeans were quoted at R$75.00 per 60 kilogram bag in Ponta Grossa, northern Parana, up 2.7% on the week but down 9.6% on the month. In Rondonopolis, southern Mato Grosso, beans were quoted at R$70.00 per bag, down 1.4% on the week and 6.7% on the month.

The decline in global prices since September prices also halted business for the 2013-14 season that was had previously gained steam in the center-West.

Good news for business was that rain has returned to dry parts of Mato Grosso and Goias with 1 to 2 inches reported in previously dry areas during the last 36 hours.

Planting in Goias and southern and western Mato Grosso is well behind schedule due to lack of rain and farmers were becoming concerned about crop prospects. As such, the showers will come as a great relief, although more precipitation is needed.

Alastair Stewart can be reached at alastair.stewart@telventdtn.com

(ES)

Posted at 9:34AM CDT 10/25/12 by Alastair Stewart
Post a Blog Comment:
Your Comment:
DTN reserves the right to delete comments posted to any of our blogs and forums, for reasons including profanity, libel, irrelevant personal attacks and advertisements.
Blog Home Pages
March  2015
S M T W T F S
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31            
Subscribe to South America Calling RSS
Recent Blog Posts
  • Brazil's Crisis and Soy
  • Agroconsult Raises Brazil 2014-15 Soy View to 95.8 MMT
  • Brazilian Soy Harvest 59% Complete
  • Brazil's Minas, East Goias Soy Hurt By Dry January
  • Drought Hurts Brazil Bahia Crop, Late Planting Limits Losses
  • AgRural Raises Brazil Soy Crop View on Excellent South
  • Blockades, Weak Real Dictate Brazil Soy Market
  • Brazil's Soy Harvest 29% Complete
  • Brazil Trucker Protest Continues Through Ninth Day
  • Agroconsult Raises Brazil Soy View to 94.7 MMT
  • Brazil Truckers, Government Reach Agreement; Blockades Continue
  • Truckers Block Mato Grosso Soy Routes
  • Rains Hinder Brazil's Soybean Harvest
  • Dollar Bump Fails to Draw Soy Farms to Market
  • Brazil Set To Raise Ethanol Mix
  • Argentine Farms Look To Paraguay
  • Brazil's Antitrust Body Approves Cosan/ALL Deal
  • Brazil's Ag Ministry Lowers Soy, 2nd Corn View
  • Brazil's Abiove Raises Soybean View to 92.3 MMT
  • Logistics Monopoly Concerns Brazil's Soy Industry