Brazil's soy trade light ahead of USDA estimates

 

 

Brazilian soy trade remains light this week on unattractive prices and ahead of the USDA's supply and demand figures.

 

CBOT May soy traded 0.50 cents lower at US$9.47 on Tuesday (March 9). Light volumes of soy have been traded this week by some farmers who need cash, Steve Cachia, an analyst at brokerage Cerealpar, said.

 

However, most farmers are waiting for the scheduled release of the USDA's supply and demand report Wednesday. If this USDA report drives up prices on CBOT, Brazilian farmers could take the opportunity to sell.

 

Cachia said Tuesday's soy crop estimate from National Commodities Supply Corp., or Conab, of 67.5 million tonnes did not impact prices.

 

He said Conab's estimate was slightly higher than expected, but upcoming USDA estimates are viewed as more likely to move international soy prices than Conab's estimate.

 

Eduardo Godoi, an analyst at consultancy AgRural in Mato Grosso, Brazil's No. 1 soy producing state, said sellers and buyers are struggling to agree on prices for their beans.

 

For instance, in the soy growing region of Sorriso in Mato Grosso, farmers want around BRL28 per bag, while buyers for their part want BRL25 per bag, Godoi said. This price range can also be seen across other states, he added.

 

Many Brazilian farmers that have already sold large volumes of their beans at good prices earlier in the season, are currently holding out for higher soy prices, while buyers believe a bumper South American crop will push prices downwards.

 

Some farmers, however, are being wooed to sell. A chief trader at a major US exporter said some Brazilian farmers on Tuesday opted to sell despite the pending USDA report.

 

These Brazilian farmers are already conceding that international soy prices could fall further, the trader said. As a result, the main exporters and crushers operating in Brazil swooped to pickup their beans, he said.

 

On Tuesday soy were being traded at around BRL38 Brazilian (US$21.20) per 60-kilogramme bag at Santos port and BRL37 at Paranagua port, he said.

 

The trader added that Chinese buyers, however, remain quiet and appear to be waiting for lower prices.

 

Brazilian agricultural consultancy Celeres said 32% of the 2009-10 soy crop had been sold as of March 5, up from 31% the week before. Brazil’s soy sales trail a five-year average of 47%.

 

Mato Grosso has sold 46% of its soy as of March 5 versus 44% the week before and 53% a year ago. While Parana sold 17% of its soy as of March 5, steady from the week before.