June 4, 2008

 

Brazil's physical soy market remains slow

   

  

Business in Brazil's physical soy market remained slow this week, analysts and brokers said Tuesday (June 4, 2008).

 

"Although we have seen some small lots (of soy) traded this week, business remains slow," said Steve Cachia, a soy market analyst at brokerage firm Cerealpar.

 

Soy prices fell 6 cents on the CBOT to US$13.59 per bushel for July on Tuesday.

 

According to Cachia, with soy prices in Brazilian reals relatively stable in recent weeks, local soy farmers who have already sold a large part of their crop can afford to speculate.

 

"Soy farmers are still hoping that new information about the US soy harvest may push up prices in the coming weeks," said Cachia.

 

David Brew, a broker at Brasoja in Rio Grande do Sul, the No. 3 soy-producing state, agreed that this week the soy market is "excruciatingly quiet."

 

Brazilian soy farmers are waiting to see whether any new news such as strikes in Argentina will help to raise prices, said Brew.

 

Cerealpar said that on Tuesday the discounts were at 38 points under for buyers of the CBOT June soy contract with no sellers, while discounts were 25 points under for buyers and 15 points under for sellers of the July CBOT soy contract at Paranagua port.

 

At the port of Santos, discounts were at an average of 30 points under the CBOT June contract, 15 points under the July contract and 13 points under the August CBOT soybean contract, according to a trader at a US multinational.

 

 

Celeres 2007-08 Soy Crop Data

 

Brazilian agribusiness consultancy, Celeres, said that Brazil harvested 59.6 million tonnes of soy in the 2007-08 crop, up 2.1 percent compared to 2006-07.

 

Celeres' report also said that Brazil planted 21.2 million hectares in 2007-08, up 2.9% versus 2006-07.

 

Celeres added that productivity was 2,805 kilograms per hectare, down 0.8% from 2006-07.

 

The consultancy also estimates 72 percent of Brazil's 2007-08 soy crop was sold as of May 30, up from a five-year average of 64 percent sold at this time of the year.

 

The two largest soy states, Mato Grosso and Parana, have 88 percent and 55 percent , respectively, of their soy sold already.

  

 

Soy Exports

 

Brazil's soy exports hit 4.4 million tonnes  in May, up from 3.3 million tonnes in April, the Foreign Trade Ministry said Monday.

 

The number is also higher than the 3.1 million tonnes registered in May 2007 from the 2006-07 crop season.

 

Soymeal exports for May were 1.7 million tonnes compared to 819,100 in April and 1.3 million in May 2007.

 

Soyoil exports for May were 147,100 tonnes compared to 102,800 in April and 211,200 in May of last year.

 

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