June 2, 2008

Brazil soy market pressured by weaker dollar

Brazil's soy market ground to a halt on Thursday (May 29, 2008) as the dollar dropped to a nine-year low of 1.62 Brazilian reals.

The dollar was down 0.40 percent on Friday morning in Sao Paulo compared to Thursday's close.

With the local currency strengthening and CBOT soy futures expected to start the day down, Brazil's main soy states are likely to remain quiet Friday.

In Mato Grosso, the No. 1 soy state, Chicago soy futures and the strong Brazilian real have practically stopped business there, according to Cerealpar.

According to Cerealpar's numbers, discounts for Brazilian soy were 50 cents under June for buyers and 42 cents under the June soy CBOT on the sell side. September soy premiums were 12 above the September CBOT soy contract on the buy side and 20 over September on the sell side.

Soymeal business had buyers willing to acquire at 7 points over the June soymeal contract on the CBOT, with no sellers.

August and September soymeal discounts were 19 under the August CBOT soymeal contract on the buy side and 13 under the August CBOT soymeal contract on the seller's side.

Soyoil discounts were 100 under the June CBOT for buyers and 80 under for sellers. August and September discounts for Brazilian soyoil on Thursday were 180 points under the August soyoil CBOT contract on the buy side with sellers willing to sell at 120 under.

Brazil is the second largest soy exporter behind the US.