November 4, 2009

 

Brazil soy trading gets lift as CBOT rises above US$10 a bushel

 

 

Brazil's soy trade picked up Tuesday (November 3) as bean prices on the Chicago Board of Trade jumped above US$10 a bushel, according to industry sources.

 

January soy on CBOT finished 12.50 cents higher at US$10.10 a bushel on Tuesday.

 

Steve Cachia, an analyst at Cerealpar in Parana state, said the rally on CBOT to above the symbolic US$10 level helped trigger some cautious selling by Brazilian producers.

 

As a result, soy producers, especially in Mato Grosso, Brazil's No. 1 soy-producing state, started to sell their new 2009-10 soy crop for delivery in January and February, he said. Mato Grosso producers, typically large agribusiness operations, took the opportunity to sell to cover expenses, he said.

 

If prices on CBOT remain firm above US$10 Wednesday, more Brazilian producers are expected to sell. Alternatively, if prices drop, producers may retreat from the market, Cachia said.

 

Samir Rosa, a soy trader at Diversa Corretora de Cereais Trading in Mato Grosso, said that trading companies Louis Dreyfus and Noble Group purchased around 10,000 tonnes of soy each in the north of Mato Grosso on Tuesday.

 

Trade was being done at around US$16.80 per 60 kilograms of soy for February delivery, he said.

 

Sandro Pereira, a trader at Dinamica Corretora in Mato Grosso, said that although small volumes of trade were completed in regions such as Sorriso in Mato Grosso, overall producers were still watching the US crop.

 

Producers are watching the weather in the US to determine the coming price direction, he said.

 

Agricultural consultancy Celeres said that Brazil's new 2009-2010 soy crop is 17 percent sold as of Oct. 30, which is steady from a week earlier. This is below the five-year average of 21 percent, Celeres said.

 

Celeres said that the old 2008-09 crop was 96 percent sold as of Oct. 30, compared with 95 percent the week before.

 

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