June 2, 2004

Brazil's Soy Crop Update

Brazilian farmers are concentrating on price changes in Chicago and trying to determine how big the 2003-04 Brazil soybean crop really is, now that the Brazilian soy harvest is complete.

Yields this year varied widely from region to region and even from field to field. Even in areas affected by weather and disease issues - drought in the South, excess rains in Mato Grosso and Asian rust - farmers reported a wide range of yields, so the debate over crop size is likely to continue until actual production totals can be deduced from exports, crush and ending stocks.

There is, nevertheless, a general feeling that this year's crop is close in size to that of a year ago.

The collapse in CBOT soybean futures during the past thirty days left the Brazilian farmers perplexed. They really believed it would still be possible to sell soybeans above the psychological barrier of 60 reals a bag, equal to $322 a metric ton or $8.53 a bushel.

According to the weekly survey of Celeres, Brazilian farmers had sold 65 percent of the 2003-04 crop as of May 28, less than the 67 percent average marketing for the past five years.

Farmers in the West-Central region have 77 percent of their crop sold, but those in the South region still have 51 percent left to sell.