August 12, 2009

Pending US Department of Agriculture data helped to damp Brazil's soy sales despite higher grain prices and a favourable foreign-exchange situation, according to industry sources Tuesday (August 11).

 

Chicago Board of Trade August soy ended 46 cents higher at US$12.16 1/2, September settled 30 cents higher at US$10.97, and November soy finished 28 1/2 cents higher at US$10.38 1/2 on Tuesday.

 

The Brazilian real eased against the dollar, which also encouraged Brazilian producers to sell their remaining beans, said industry sources. One dollar rose to BRL1.84 on Tuesday.

 

The USDA is scheduled to release its first 2009 crop-production estimates based on field surveys and its monthly supply-and-demand estimates Wednesday at 8:30 a.m. EDT (1230 GMT).

 

The average of analysts' estimates projects a crop size of 3.213 billion bushels, with a yield of 42.1 bushels per acre. The averages ranged from 3.0 billion to 3.275 billion bushels for production and 40.9 to 43.5 bushels for yield.

 

As for Tuesday trade, a chief trader at a major US soy buyer said more producers on Tuesday were willing to sell their beans. "We bought 20,000 tonnes," he said.

 

The trader said the Brazilian soy market is extremely tight, because of strong exports throughout the year. As a result, Brazilian soy premiums have reached high levels, he said.

 

The trader said trade was being done at 250 cents over the November soy contract on CBOT this week. This compares to premiums for beans from the gulf at 200 cents over the same CBOT contract, he noted.

 

The trader said buying isn't aggressive. "We have soy stocks to last until November and, if needed, crushing can be reduced to half speed to keep beans until the next harvest," he said.

 

Little trade is being done in the centre-west soy belt such as Mato Grosso, the No. 1 soy producer, where most of the beans have been sold.

 

Most of the remaining beans are in the south of Brazil in states such as Parana, the No. 2 soy producer, the trader said.

 

Brazilian grains consultancy Celeres said the 2008-09 soy crop is 87 percent sold as of Friday.

 

This is up 1 percent from the previous week and in line with the historic average, according to Celeres.

 

Brazil is in the soy inter-harvest period.

 

Buyers and sellers have different hopes about Wednesday's USDA crop-production report, said Steve Cachia, an analyst at Cerealpar.

 

Buyers hope the news will be neutral, while sellers are waiting for unexpected news about the weather that might increase prices.

 

Soy prices didn't rise as fast as the sellers hoped Tuesday at Paranagua port, despite the better CBOT and forex, said Cachia.

 

Prices were at around BRL51 per 60-kilogramme bag on Tuesday, only slightly ahead of BRL50.30-BRL50.70 per bag on Monday at Paranagua port, he said.

 

Cachia added that premiums remain high on Tuesday with buyers asking for around 200 cents over the September CBOT contract. Sellers wanted 250 cents over the same contract.

 

With a wide spread between buyers and sellers, they couldn't agree, he said.

 

A trader at Dinanica Corretora in Mato Grosso state also said trade was quiet. The price wasn't enough to attract the low number of remaining sellers, he said.

 

Brazil is the No. 2 producer of soy after the US.