April 15, 2009

 
International soy prices and favourable foreign exchange worked in unison Tuesday (April 14) to help propel Brazil's physical soy trade, industry sources said.

May soy ended 14 1/2 cent higher at US$10.36 a bushel on the Chicago Board of Trade Tuesday, and November soy settled 12 cents higher at US$9.39 1/4.

One US dollar climbed to 2.19 Brazilian real from around BRL2.17 on Monday.

This meant that Brazilian soy farmers saw a double gain of higher international prices and more cash for their beans in the local currency due to the favourable exchange rate.

"We've been buying like mad from [soy] producers in all parts of Brazil from the ports through to the countryside," said a chief trader at a major US soy exporter.

The trader said business Tuesday was being concluded at good premiums of 40 cents over the May soy futures contract on CBOT. Premiums are better than usual due to the smaller supply of soy as buyers scramble to get beans with a smaller crop coming from South America, especially Argentina.

Markets such as China have also shown good demand. The trader said that four to five cargos of beans, each at around 65,000-70,000 tonnes, were booked last week to be shipped to China in the second half of April and May.

A trader at Cerealpar in Mato Grosso, Brazil's No.1 soy producer, said most major players were buying beans Tuesday.

Companies such as Cargill and Louis Dreyfus bought between 3,000 to 5,000 tonnes each of soy in Mato Grosso, he said.

Soy buyers were looking for around 38 cents over the May contract on CBOT in Mato Grosso. Sellers wanted 43 cents over the same contract.

Steve Cachia, a soy analyst at Cerealpar, said soy producers were psychologically buoyed by local prices of around BRL51 per 60-kilogram bag at Paranagua, the main grain port.

Buyers were somewhat quieter on Monday, with local soy prices at Paranagua at BRL49 per bag and BRL50 per bag on Friday.

"They move in and sell as prices rise, but ensure that they save beans to speculate at a later date," he said.

Brazilian agricultural consultancy Celeres Monday said forward sales of the soy crop reached 47 percent by Friday from the expected 57.8-million-tonne 2008-09 crop.

Celeres said this was up 2 percent from a week earlier and 63 percent from the same time a year ago. Brazil is currently in the midst of its harvest, with regions such as Mato Grosso almost finished.

Brazil is the world's No. 2 soy producer after the US.