April 9, 2008

 

Brazil soy market faces slow week on falling dollar, port strikes

 

 

Brazil's soy market has been relatively slow this week amid falling soy prices, decline of the US dollar and the continued partial strike of workers at the Paranagua Port, traders said.

 

Paranagua's slowdown has not helped the matter. Embarkments are behind schedule, creating an impact on new business, said a broker at Cerealpar in Parana.

 

Archer Daniels Midland Co. (ADM) and Cargill were the biggest buyers this week, another broker said.

 

The dollar fell below BRL1.70 (US$1) for the first time since March 18 on Tuesday. Soy futures fell to US$12.51 a bushel for the May soy contract on the Chicago Board of Trade. Prices are still fine for Brazilians, but the spot market tends to grind to a halt when soy prices fall, said a trader at a big US soy exporter.

 

Discounts for soy at Paranagua were 45 cents under the May soy contract on the CBOT for bidders and 35 cents under May from the sellers, with very little business.

 

A broker at Soma Corretora said Archer Daniels Midland was the big buyer early in the week at Paranagua, but most business was happening elsewhere, mainly in Santos and Rio Grande do Sul.

 

Trade this week for soymeal in Santos was going for 14 points under the May contract, with sellers willing at nine points under the May soymeal contract on the CBOT.

 

Buyers offered 35 points under the June soymeal contract, with sellers willing to let go at 32 points under June, according to a large US soy exporter in Sao Paulo.

 

Soyoil was being offered at 140 points over the May soyoil contract on the CBOT, with bids at 100 points over May.

 

June offers were equal to the CBOT soyoil price for July and 30 points under July's soyoil CBOT contract were bid this week, according to the US exporter.