April 27, 2009

Brazilian soy sales are picking up, and the number of vessels lining up to take on soy indicates April may be a record month for exports, the grain export sector said.

 

The line-up of ships scheduled to export soy from main southern ports through April 20 showed exports in excess of 4 million tonnes for the month. Brazil is winding down its harvest of its roughly 58-million-tonne crop.

 

The record shipment of soy out of Brazil for a month was in May 2008 at 4.44 million tonnes. In April of last year, Brazil shipped 3.34 million tonnes.

 

Exports are traditionally strong from April through June for Brazilian soy as the harvest peaks and ends in the south-central grain belt over the period.

 

But demand and prices quoted for forward months are even higher than the spot market, as strong Chinese demand, dwindling US stocks and falling Argentine yields fuel what is expected to be a bull-run in CBOT soy futures.

 

Grain Exporters Association (ANEC) general director Sergio Mendes said Brazil would benefit directly from China's plan to double its official soy stocks from 3 million tonnes to 6 million tonnes.

 

Cerealpar traders' chief analyst Steve Cachia said producer sales of beans have picked up, especially in Parana and in top producing soy state Mato Grosso.

 

Traders quote spot Freight On Board soy at BRR52 per 60-kilogramme bag at the port of Paranagua, up from 48 two weeks ago. The port is expected to prioritise soy shipments through June, at the expense of corn exports, until the harvest pressure eases.

 

Traders said May is the most active month for physical soy sales as freight costs were expect to ease now that harvest is winding down.

 

Sandro Pereira, a trader at Dinamica Corretora in Rondonopolis, the main grain staging centre in southern Mato Grosso, quoted soy at BRR43.50 a bag, up BRR1.50 from last week.

 

Producers and traders expect final output numbers over the coming weeks to slip slightly in Brazil as weather has been dry in some isolated late-harvesting regions like southern Mato Grosso and parts of Rio Grande do Sul the third top producing soy state.

 

Tergrasa e Termasa terminals director Guilhermo Dawson said movement of grain through the port will set a new monthly record in April due to soy shipments, which should reach 1 million tonnes.

 

The two terminals, which move 75 percent of the state's soy exports, have shipped 626,000 tonnes of soy in April so far, up from 580,000 tonnes in April 2008.

 

China's commerce ministry warned on Friday (Apr 24) about potential risks of oversupply as the country's soy imports in April approach record levels.

 

Export prices are atypically well above CBOT futures prices for this time of year, when the supply-side pressure of harvest normally drives local prices below CBOT prices.

                

US$1 = BRR2.183 (Apr 27)