May 3, 2004

Brazil Soy Market More Active On Improved Supply

Brazil's soy market picked up over the past week as producers started selling and demand from large buyers was aggressive, traders said.
 
"The end of the month period has forced some producers to sell to improve cash flow while demand from industry is strong," said a Mato Grosso-based trader.
 
A number of crop estimates released this week, all pointing to a smaller Brazilian crop, provided the market with fundamental news and stirred up trading.
 
Earlier this week, the Brazilian Census Bureau, or IBGE, lowered its estimate for the 2003-04 soybean crop (October-September) to 52.6 million metric tons, down from last month's estimate of 56.93 million tons but still higher than last year's 51.5 million tons.
 
The Agriculture Ministry's National Commodity Supply Corp., or Conab, also shaved its estimate to 50.2 million tons, while private analysts Safras e Mercado pegged the crop at just 49.98 million tons.
 
"The general consensus is that the crop will be around 50 million tons, with most of the damage in Rio Grande do Sul and Mato Grosso," said the trader. Harvesting is now 90% complete, according to Safras, making crop estimates more accurate.
 
Meanwhile, prices in Mato Grosso have been firm over the past week with business being carried out at 49.00 Brazilian reals ($1=BRL2.93) per bag in Rondonopolis and BRL45.50 at Lucas do Rio Verde.
 
Soybean discounts for May shipment were quoted at 110 to 125 cents per bushel under the equivalent Chicago Board of Trade futures contract, compared with 90 to 110 cents under last week.
 
At the principal export port of Paranagua, soybeans were trading at around BRL56.30 to BRL57.00 per bag on Thursday, while in Ponta Grossa, northern Parana, soybeans stood at BRL54.00 and BRL55.00, slightly up on last week.