July 18, 2007

Brazil's soy trade slows as CBOT prices slide 

Brazil soy farmers have stayed on the sidelines at the start of the week due to decline in soy prices on the Chicago Board of Trade, traders said Tuesday (Jul 17).

Late last week, prices were around 35 Brazilian reals (US$18.81) per 60-kilogram bag at the Paranagua Port in south Brazil, but fell to BRL33.50 (US$18.01) on Tuesday.

CBOT soy futures started low on Tuesday, extending Monday's losses. August soy futures were down over 9 cents to US$8.62 per bushel and November soy are down over 11 cents to $8.87.

This is contrary to Brazilian expectations that soy would go beyond US$9.50 and more. Soy for the March and May 2008 contracts are at US$9.23 per bushel. Brazil begins its soy harvests in March.

Brokers are urging farmers to wait for prices to rise. Farmers are also watching US weather keenly to see if bad weather there could push up soy prices.

The fact that Brazilian stocks are not at high levels now could also contribute to the lack of deals, according to a soy analyst for AgRural, a consulting firm.

AgRural will release its 2007-08 soy crop planting intentions estimate this week.