Brazil's soy trade stagnant as farmers await better prices

Brazil's upcoming 2009-10 soy crop remained at 23% sold as of January 15 and soy trade is expected to remain lukewarm until international prices rise.

 

Farmers are under no pressure to sell especially in the south. For instance, in Parana, farmers are getting ready to harvest their new crop. When the harvest starts, they can usually store the beans in the cooperative' facilities, analyst Steve Cachia said.

 

Brazil's soy sales were also at 23% of the new crop sold as of January 8 and at 26% a year ago, agricultural consultancy Celeres reported. Brazil's soy sales also trail a five-year average of 36% of soy sold this time of the year.

 

Brazilian producers are still inactive in the market and want better soy prices, analyst Leonardo Menezes said. The Brazilian real against the US dollar has also trimmed the willingness of producers to sell since they get less compensation in the local currency, he added.

 

One US dollar is trading at 1.77 Brazilian reals on Tuesday (Jan 19).

 

In Mato Grosso, the No. 1 soy-producing state, farmers sold 36% of their upcoming soy crop as of Friday (Jan 15), unchanged from the same level last week.

 

Soy sales in Parana, Brazil's No. 2 soy producing state, were frozen at 12%, unchanged from the previous week.

 

Celeres said that around 1% of the soy in Mato Grosso were already harvested, which accounts for six million hectares. The harvest is expected to be an estimated record-breaking 64 million tonnes of soy.

 

March soy futures on Tuesday on the Chicago Board of Trade slipped 1 1/4 cents lower at US$9.72 3/4 in early trading.

 

A trader at a major US exporter said that with current prices in Chicago, Brazilian farmers are unwilling to sell.

 

Only farmers in Mato Grosso have done any business due to 4% of their soy being harvested. But trade is slow, he said.