International prices boost Brazilian soy trading

Brazil's soy trading gathered pace this week as a result of rising international prices.

Nearby May soy futures at the CBOT settled 14 cents higher at US$9.59 a bushel Wednesday (March 17), after gaining 15 cents Tuesday and 4 1/2 Monday.

Brazilian farmers sold their beans especially this week as prices and premiums were attractive, said a chief trader at a major US soy exporter. He also said the exchange rate between the dollar and the Brazilian real remained neutral, with the dollar fetching BRL1.76 (US$0.99) Wednesday.

The soy trader said farmers appear to be realising that this could be an appropriate time to sell as prices are likely to fall with a large crop of 66-67 million tonnes

The Brazilian Vegetable Oils Industry Association, or Abiove, raised its forecast for the 2009-10 soy crop to 67.6 million tonnes from its previous estimate of 65.2 million tonnes in February. The 2008-09 crop produced 57.8 million tonnes. The 2009-10 crop is in the midst of being harvested.

Most international soy buyers also have a tight supply of beans at their disposal and were aggressively trying to buy this week, the trader said.

Steve Cachia, an analyst at local brokerage Cerealpar in Parana, said Brazilian farmers cashed in to pay for their harvesting costs, while others continue to hold out for higher prices.

Although fundamentals point to lower international soy prices, farmers hope that favorable news about the weather, the recovery from the economic crisis, or the US crop will help push up prices, he said.