September 23, 2009

Brazilian soy trade remained lacklustre Tuesday (Sept 22), with the unfavourable exchange rate wiping out gains on the Chicago Board of Trade, industry participants said Tuesday.

 

CBOT November soy futures finished 8 1/2 cents higher at US$9.22 per bushel Tuesday.

 

The Brazilian real Tuesday settled at BRL1.798 to the dollar, its strongest level to the US dollar all year.

 

"This wiped off any gains in soy prices on CBOT," said Steve Cachia, a grains analyst at consultancy Cerealpar in Parana.

 

Cachia said sellers wanted BRL46 per bag Tuesday at Paranagua port with the exchange rate keeping local prices unchanged despite the rise on CBOT.

 

Cachia added that buyers wanted premiums of 56 cents over the CBOT March 2010 soy contract Tuesday. Sellers wanted 60 cents over the same contract at Paranagua port. Few buyers need beans for export so offers are scarce, he said.

 

Marcelo Bartholomeu, a risk consultant at FC Stone, agreed that Brazilian farmers weren't selling Tuesday as the unfavourable exchange rate made prices unattractive.

 

Brazilian soy farmers also took the opportunity to trade their beans last week as soy prices rose on CBOT, Bartholomeu said. Having sold last week, producers see prices this week as unattractive, he said.

 

Sandro Pereira, a trader at Dinanica Corretora in Mato Grosso, said that purchasing beans this week is difficult due to small volumes for sale during the inter-harvest period.

 

Pereira said that buyers such as crushers were willing to pay premiums of 210 cents over the November soy contract on CBOT. Sellers, however, want 240 cents to 250 cents over the same contract at Santos port. Little trade is being done, he said.

 

Brazilian agricultural consultancy Celeres said that trade remains slow, with just 14 percent sold of the new 2009-10 soy crop as of September 18.

 

A trader at Diversa Corretora de Cereais Ltda in Rondonopolis in Mato Grosso agreed that local soy crushers were tamely buying small lots this week.

 

Sellers are reluctant to sell at BRL42 per 60-kilogramme bag in Rondonopolis Tuesday when they saw prices of around BRL44 per bag last week, the trader said.

 

The trader added that Brazil's soy trade won't pick up unless warnings of frost appear in the US that lift soy prices on CBOT, he added.

 

In terms of planting the new 2009-10 soy crop, Cachia said the first farmers have already begun seeding.

 

The recent rain hampered some planting in Mato Grosso state, Cachia noted.

 

On the other, the damp subsoil is in good condition for planting and farmers are hoping for high yields, he said.

 

Brazil is the world's No. 2 soy producer after the US.

 

US$1 = BRL1.7935 (Sep 23)