February 11, 2009

Soy prices have not been strong enough to coax Brazilian soy farmers into selling their beans this week, soy specialists said Tuesday (February 11).

 

March soy on the Chicago Board of Trade finished 8 cents lower at US$9.94 a bushel on Tuesday, while the US dollar strengthened to around 2.28 Brazilian reals.

 

Bunge, ADM, Cargill, Louis Dreyfus were all trying to buy beans on Tuesday, but there are few sellers in the market, said a chief trader at a major US exporter.

 

The trader said soy have bean flowing slowly into the market from the early harvests in Brazil's centre-west soy belt of Mato Grosso, the top soy producing state, and Goias. There are also small volumes from Parana, the No.2 soy producing state.

 

But beans are still relatively difficult to get, he said.

 

Local consultancy Agrural said that Mato Grosso state had harvested 14 percent of its beans by February 6, while Parana had harvested 4 percent. Brazil overall has harvested just 5 percent of its soy by February 6, according to Agrural.

 

The trader is looking at the standard flat price for soy of around US$390 and US$400 per tonne in the southern port of Parangua. Trade was being done at 20 cents over the May contract on the CBOT, he said.

 

Another trader at a Brazilian brokerage in Mato Grosso said that major trading companies were paying between BRL39 and BRL40 per bag on Tuesday in the spot market in Mato Grosso state, mainly for small volumes of 2,000 or 3,000 metric tonnes. This compares with BRL40 per bag on Monday, he said.

 

Steve Cachia, grains analyst at Cerealpar, said Brazilian soy farmers had hoped on Tuesday that the lower crop estimates from the US Department of Agriculture would push up soy futures prices on the Chicago Board of Trade. But, instead, the market opened lower and failed to stimulate buying, said Cachia.

 

The USDA's February estimate on Tuesday of the 2008-09 Brazilian soy crop is close to the recent estimate by Brazil's Conab.

 

USDA sliced 2 million tonnes of soy output from Brazil to 57 million tonnes "due to dry conditions especially in the southern producing areas." Last week Conab estimated the Brazilian crop at 57.2 million tonnes, which is close to private estimates.

 

Argentina soy production was pegged at 43.8 million tonnes, compared with the USDA's January estimate of 49.5 million tonnes.

 

"There was nothing in the USDA numbers to surprise us, and their estimate (for Brazil) was close to our estimate of 57.7 million tonnes," said Daniele Siqueira, a soy analyst at consulting firm AgRural.

 

Celeapar said that sellers were asking for 60 cents over the March soy futures contract on CBOT on Tuesday, while buyers waned 50 cents over the same contract, with not much trade being done.

 

Cachia said that spot prices at Paranagua, the main Brazilian grain port, were around BRL50 per 60-kilogramme bag of soy compared with BRL51 per bag on Monday.

 

The soy trade has slowed since mid-January, and only around 33 percent of the new 2008-09 soy crop has been sold so far, Cachia said.

 

Brazil is the world's No. 2 producer of soy after the US.