August 6, 2008

 

Low prices may halt Brazil's soy market this week

Brazil's physical soy market has ground to a halt this week, brokers and analysts said Tuesday (August 5).

 

"Business is even slower than last week and trade is at a standstill due to low prices on the Chicago Board of Trade," said Steve Cachia, a soy market analyst at grain brokerage firm Cerealpar.

 

November soy futures fell 26 cents to $12.69 a bushel on CBOT Tuesday.

With soy prices moving downward in recent weeks, there's virtually no interest to buy or sell, according to Cachia. He said that many soy producers feel they missed the boat and hope for a rally with the remainder of Brazil's 2007-08 soy, while buyers are watching to see whether soy prices fall further.

Buyers at Paranagua were offering 45 cents over the August and September CBOT soy contracts, with no major sellers on Tuesday.

 

A trader at a major US soy trading company said that Brazil's soy business has been quiet since June.

The major US soy trader shipped only between 20,000 tonnes and 30,000 tonnes last week and doesn't expect to ship more this week.

"Volatile markets are making business almost impossible, the trader said, noting that volumes were tiny.

 

Felipe Assarisse, chief commodities broker at Flow Corretora, said the Brazilian soy market was restrained this week.

 

Soy producers are waiting to see whether the new USDA soy numbers due on Aug. 12 will help push up prices, Assarisse said.

 

Agribusiness consultancy Celeres estimates that Brazil harvested 59.6 million tonnes of soy this season, with the harvest now over.

   

Celeres also said that Brazil had sold around 87 percent of the 2007-08 crop by August 1, compared with 86 percent the week before and a five-year average of 81 percent.

 

Of the total states, Mato Grosso has sold an estimated 93 percent of its crop, Parana 81 percent and Rio Grande do Sul 70 percent. The three states are Brazil's top producers.

 

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