December 16, 2009

 

Brazil's soy trade sluggish as sellers eye higher prices

 

 

Brazil's soy trade remains sluggish this week as buyers fail to woo sellers who want higher prices.

 

January soy on the Chicago Board of Trade remained stable at US$10.55 a bushel on Tuesday.

 

"Most exporters and crushers are trying to buy beans this week, but sellers remain reluctant to sell," Steve Cachia, a soy analyst at Cerealpar said.

 

Cachia said although soy trade was done on Monday as CBOT prices rose, many farmers psychologically are holding out for US$11 per bushel futures prices.

 

If international soy prices don't hit US$11 per bushel by the year-end, then farmers probably won't sell more of their beans this year, he said.

 

Moreover, the weak US dollar against the Brazilian real is also eroding Brazilian producers' profits in the local currency, he said. One dollar was hovering around 1.75 Brazilian real on Tuesday.

 

Local agricultural consultancy Celeres said that Brazilian soybean sales remain unchanged from recent weeks with only small deals being done.

 

About 19% of the new 2009-10 crop was sold and 98% of the prior 2008-09 crop sold as of Dec. 11, the consultancy said.

 

A chief trader at a major US exporter said that sellers are looking for around BRL800 per tonne of soy to ship beans.

 

The usual players such as the Chinese are trying to buy soy, but volumes aren't large, he said.

 

Premiums for soy remain positive with buyers asking for 38 cents over the March contract on CBOT. Sellers want 48 cents over the same contract, he said.

 

Buyers are also asking for 14 cents over the April contract on CBOT. Sellers want 18 cents over the same contract.

 

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