June 5, 2008

US soy trading companies more cautious on soy buying


US soy traders are more apprehensive on signing advanced contracts for 2008-09 crop due to more volatility in soy markets, Agrosecurity consulting company said.

The company's recent evaluation is based on sales of about 15 percent of soy in Mato Grosso, the leading soy state in Brazil.

At the same period last year, the soy crop already sold was between 35 and 40 percent, Agrosecurity director, Fernando Pimentel, said.

In 2007, the strong soy prices on CBOT brought serious problems for the trading companies, especially the smaller ones, in the need to tie up large quantities of capital due to the prices on the American commodities market.

US analysts said that at the moment of the greatest increase in the CBOT soy quotations at US$15 a bushel, the value of resources represented would have been approximately US$6.3 billion, equivalent to 60 percent of the 2007/08 harvest.

This year, the trading companies are more cautious than last year.

So far, the anticipated deals are being done only with those clients with whom they have relations of the greatest confidence, one trader said.