August 6, 2007

Brazil already sold 79 percent of 2006/07 soy crop

Seventy-nine percent of Brazil's 2006/07 soy crop has been sold as of August 3, consulting firm Safras & Mercado said Friday (August 3).

The number is slightly higher than this time last year, when 77 percent of the 2005/06 crop was sold.

Safras & Mercado said that higher soy prices in the local market, currently around 33 Brazilian reals (US$17.64) a 60-kilogramme bag, gave farmers an incentive to sell.

Historically, Brazil usually has about 76 percent of the crop sold at this time.

Safras & Mercado also said it suspects that high farm debts have led farmers to sell into the market sooner than they did in previous years.

Mato Grosso, the No. 1 soy-producing state, has sold 92 percent of the 2006/07 crop as of August 3. The No. 2 producer, Parana, has sold 71 percent and the no. 3 producer Rio Grande do Sul sold 64 percent at this time. All three states have sold more of their crop so far this year in comparison to this time last year.

Favourable soy futures prices have farmers selling the 2007/08 crop before they even plant it, with an estimated 21 percent of the crop already committed to sale compared to 9 percent at this time last year. The historic average for early crop sales at this time of year is around 11 percent.

Brazil starts planting soy in early October and harvests in March.