June 18, 2008

Nearly a quarter of Brazil's 2007-08 soy crop sold for under US$10 a bushel

Twenty-three percent of Brazil's 2007-08 soy crop was sold at under US$9.30 a bushel, basis Chicago Board of Trade, agribusiness consultancy Celeres said Tuesday (June 17, 2008).

Despite soy prices rising to over US$10 a bushel start late last year, farmers in Brazil raced to fix soy prices on fears the dollar would undercut them, or soy prices would decline. In the 2006-07 crop, farmers were selling soy for around US$7.50 and under a bushel.

Once prices starting rising at the start of 2008 to over US$11 a bushel, farmers waited and hedged 18 percent of their crop at prices between US$11.86 and US$13.11 CBOT, and another 23 percent at prices over US$13.11 a bushel, compared with historic averages of US$6.40 a bushel, Celeres said. The higher soy prices guaranteed farmers a healthier profit margin than 2006-07.

Roughly 76 percent of Brazil's soy crop has been sold as of June 13, Celeres said Tuesday.