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February 18, 2014

 

Brazil's soy prices rise due to dry weather and high demand

 

 

Triggered by concerns with the dry weather in some producing regions and the significant global demand, Brazil's soy prices rose during the second week of February.

 

Players surveyed by the Centre for Advanced Studies on Applied Economics (CEPEA) indicate that, until the second week of February, the situation of crops in the South, Southeast and parts of Mato Grosso do Sul State was considered critical. In some regions, players surveyed by CEPEA forecast losses of circa 80% in grains production.

 

Specifically in Parana, Seab/Deral (Secretariat of Agricultural and Supply of Parana State) indicates that 20% of the planted area had been harvested until February 10, while for Rio Grande do Sul State, the harvesting has not started yet.

 

In Mato Grosso State, 21.7% of the area had been harvested until February 7, with an average yield of 53.5 bags per hectare, according to Imea (Mato Grosso Institute of Agricultural Economics) data. Due to favourable weather conditions, the yield picked up from 51.6 to 54 bags per hectare, for an increase of 8.39% compared to the crop before. This fact indicates an increase of 13.6% of the volume produced in Mato Grosso, at 26.9 million tonnes.

 

In the first fortnight of the month, the ESALQ/BM&FBovespa Index for the soy delivered at the Paranagua port upped 5.31% and closed at BRL71.82 (US$30.13) per 60-kilogramme bag on February 14. In the same comparison, the CEPEA/ESALQ Index for soy (Parana state - reference for trades in Brazil), edged up 5.63% and closed at BRL67.76 (US$28.42) per 60-kilogramme bag.

 

Conab (National Company for Food Supply) data indicate that the Brazilian production of soy in the 2013-14 season might total 90 million tonnes; and the domestic consumption might be roughly 40.75 million tonnes.

 

According to Secex (Foreign Trade Secretariat), Brazil exported only 30,600 tonnes of soy in January. Soymeal exports totalled 901,700 tonnes, decreasing slightly 1.1% in relation to December 2013. International sales of soyoil decreased 21.3% in the same comparison, totalling 65,800 tonnes in January.

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