July 1, 2009

Brazil's soy trading may get a boost in the coming days from a USDA crop estimate Tuesday (June 30) for the oilseed, although transactions are few this week.

The report was "positive for Brazil," said Flavio de Franca Jr., a senior analyst at Safras & Mercado. Franca predicts the soy market in Brazil should strengthen some in the coming days due to the estimate.

The USDA estimated US 2009-10 soy planted acreage at 77.483 million acres, below the average analyst estimate of 78.305 million.

Currently, transactions are few in the Brazilian soy trading market. "Offers are vanishing," said a trader for a large crusher. "Prices are low, so nobody wants to sell."

The trader said the basis for the new Brazilian crop is rising. The premium is 40 cents over the Chicago market for March, he said.

Brazil will plant its new soy crop later this year for harvesting between February and May of 2010.

The USDA forecast "is good news in the long term" for the Brazilian market though trades have been few in the local market, said Anderson Gomes, an analyst at Brazilian agricultural consultants Celeres.

Crushers in Brazil are living on what he termed a "hand-to-mouth" basis, paying BRL40 (US$20.42) for a 60-kilogram bag this week in Mato Grosso, Gomes said. The local prices paid by crushers are changed little from a week ago, he said.

Trading was "totally stopped this week," said Steve Cachia, an analyst of Cerealpar. "Producers are waiting for something to happen."

Brazil is the world's second-biggest soy producer, behind the US.