April 11, 2007

 

Brazil's soy farmers prefer selling corn over soybeans

 

 

Brazil's soy farmers are more interested in selling corn this week than soybeans, some brokers and cooperatives said Tuesday (Apr 10).

 

"Farmers have been selling a lot of corn this week to get cash, and that's been done at the expense of soybeans," said David Brew, a broker at Brasoja.

 

Soy farmers are watching Chicago Board of Trade prices decline along with the dollar. May soybean prices closed down to US$7.42 per bushel on the CBOT and the dollar remains around 2.028 Brazilian reals.

 

"Corn prices are just better at the moment and that's where the business is in the south," said Airtonne Zalemena, a trader at Cootricampo cooperative in Rio Grande do Sul, one of Brazil's top soy and corn producing states.

 

Elsewhere, big trading houses like Coinbra and Archer Daniels Midland said business was slow so far this week, with most soy exporters well stocked.

 

Over half of the soy crop has been sold already, according to private estimates, with over 70 percent sold in

Mato Grosso state, the no. 1 soy-producing state, according to Cerealpar.

 

"There are buyers in the market today but we aren't able to convince farmers to sell. They are well sold already," said Silmara Gallo, a broker at Cerealpar.

 

Soy premiums were 24 cents below the May CBOT soybean contract on Monday, down 3 cents from Friday. Soymeal premiums were unchanged at 22 cents below the May CBOT soymeal contract and 360 cents below the May CBOT soyoil contract, according to brokerage firm Alianca Corretora.

 

Port prices at Paranagua were 31.70 Brazilian reals per 60-kilogramme bag on Monday, or US$15.61 per bag. Prices declined from last week's BRL33.00 per bag.

 

Local farm consultancy AgRural said Tuesday that 77 percent of Brazil's soy crop has been harvested as of this week. The group put Brazil's soy crop at 60 million   tonnes, a record-breaker.

 

"With premiums declining, a weak dollar and Chicago uncertain, farmers are reluctant right now to do business and willing to speculate on US crop weather in the summer," said Anderson Gomes, a soy-market expert with consulting firm Celeres.

 

On Tuesday, the government announced it would offer over 1 million tonnes of soybeans in its subsidy auction on Friday. That means soy farmers in the centre-west, especially northern Mato Grosso, will wait to do business on Friday rather than sell into the spot market.