July 8, 2009

Domestic and international trading in soy ground to a halt in Brazil as Chicago Board of Trade oilseed futures tumbled Tuesday (Jul 7) to two-month lows.

 

"I did not hear of any transactions in the domestic market," said Flavio de Franca Jr., senior soy analyst at Safras & Mercado in Curitiba.

 

Quotations opened from one to two reals higher per 60-kilogramme bag Tuesday for the internal market, he said, though apparently no sales took place.

 

"I did not hear of any transactions," Franca said.

 

A similar experience was told by a trader in Brazil for an international food processor. "There were no transactions today," he said.

 

August contracts were quoted at a differential of 130 over Chicago on Monday for buyers and 140 over the CBOT for sellers, he said.

 

"There is no reference," said Jackson Alaror, a broker at Brazil's Cerealpar. "There were no trades with this drop" in the Chicago market, he said.

 

Brazil's National Commodities Supply Corp., or Conab, report Tuesday that the recently harvested 2008-09 soy crop was 57.3 tonnes, 4.8-percent below a year earlier, was no novelty for the market, according to Franca.

 

"The figures are a bit outdated," he said.

 

Safras & Mercado's most recent estimate for the 2008-09 crop is that it reached 56.8 million tonnes, Franca said. The firm will make its first estimate of the 2009-10 soy crop on July 24, he said.

 

Brazil's 2009-10 crop will be planted later this year and harvested between February and May 2010.

 

Internal prices rose in Brazil because of exports, according to Brazil's Center for Advanced Applied Economic Studies, or Cepea. Domestic prices rose because the volume of soy exported reached a record 6.2 million tonnes in June, the institute said on its Web site.

 

Brazil's soy exports rose to 4.6 million tonnes in May from the 4.4 million tonnes exported in April, Brazil's Foreign Trade Ministry said in early June.

 

The average of five regions of Parana state registered a price rise of 1.5 percent between June 26 and July 3, closing at BRL50.79 (US$25.69) on Friday, Cepea said Monday.

 

The rising Brazilian soy exports are the result of the drop in production in Argentina, the lessening of inventories in the US and China's interest in rebuilding its bean stocks, Cepea said.

 

Brazil is the world's second-biggest soy producer after the US.