September 8, 2003

 

 

Brazil Soy Prices Stable; Export Business Good 

 

Brazil's soybean prices were mostly unchanged from a week ago, as a strengthening in the local currency cancelled out higher international prices, traders said.

   

"Business has been good, but producers are still a little reluctant to sell as they expect prices to rise in coming months," a Sao Paulo trader said.

   

He added that reports of a lower crop in the U.S. due to dry conditions continues to give support to international prices.

   

"The stronger local currency is the only concern for producers," said the trader.

   

The Brazilian real finished Friday at 2.90 to the dollar, compared to BRL3.00/dollar last week.

   

Soybeans at Paranagua port were trading this week at around BRL40.00 per 60-kilogram bag, while in Ponta Grosso, prices were BRL39.00 a bag, unchanged from last week.

   

Meanwhile, traders said there is strong demand from China, which meant the export market was fairly active this week.

   

"China extended their temporary ruling regarding the import of GMO soy from September to next April, which was positive for the market," said the trader.

   

Soybeans for September export were quoted at 45-50 cents over the Sep contract on the Chicago Board of Trade at Paranagua port on Thursday, compared with 46-52 cents last week.

   

Discounts for new-crop soybeans for April shipment stood at 10-14 cents on Thursday compared with 11-14 cents last week.

   

Soymeal export discounts slipped to $17-$19 per short ton under the CBOT Sep contract at the port, compared with $12-$15 registered at the same time last week.

   

Soyoil premiums were steady this week with September premiums sitting at 100-120 points per pound over Chicago Board of Trade futures on Thursday, compared to 80-100 a week ago.

   

Traders said forward sales of the next harvest continued slow this week as producers wait to see how the U.S. crop develops.

   

According to the local Celeres grains consultancy, around 23% of next year's crop had been sold up to Aug. 29, compared to 28% at the same time last year.

   

In other news, Brazilian Association of Vegetable Oil Industries, or Abiove, slightly raised its estimate for the 2003-04 soybean crop to 51 million metric tons, from 50.8 million tons in the previous report.

   

The government is expected to present a new bill to regulate genetically modified seeds here, but with only a few weeks to go before planting, farmers are not expecting any changes for this season.

   

"Farmers are preparing the soil for planting and have already bought seeds," said a trader.