March 29, 2007

Conab: Brazil sells 428,653 tonnes soybean in auction

Brazil sold 428,653 tonnes of soybeans out of one million tonnes offered in a subsidy auction to farmers Wednesday (Mar 28), according to the National Commodities Supply Corp (Conab).

In the auction, farmers bid for the rights to receive a subsidy over the strike price of 22.50 Brazilian reals (US$10.86) per 60-kilogramme bags of soy.

Mato Grosso, Bahia and Piaui farmers were the only ones to show interest out of a total of 12 eligible states. All of the 8,000 tonnes offered in Piaui, a north-eastern state, were sold. Some 9,000 tonnes were negotiated in Bahia out of a total offering of 36,000 tonnes.

Most of the action was in Mato Grosso, Brazil's top soy-producing state. Over 400,000 tonnes were negotiated in Mato Grosso, giving farmers there the opportunity to sell soy over the strike price. The subsidy protects farmers should prices fall further. The government pays the subsidy directly to the farmer.