Brazil Soy Farmers Forward Selling
Forward sales by Brazilian soy growers have taken off this year, driven by firm Chicago futures prices, a weak domestic currency and strong consumer demand, says independent crop analysts Safras e Mercado.
Forward sales of 2002-2003 crop, which Safras sees hitting 48.2 million metric tons, reached 26% by Aug. 2 versus 15% last year at this time and 6% on average over the last five years, the firm said in a report.
Soybean traders told Reuters News Service that March and April delivery have been the most common months sold. And sales have been strongest in the Center-West states, the principal region of Brazil's soy belt which kicks off Brazil's soy harvest in February.
But producers are being cautious about selling the remainder of their old-crop soybeans. Safras estimated that producers have now sold 81% of the 2001-2002 crop – estimated at 41.5 million tons – compared with 86% by this time last year and 83% on average over the last five years.
"Sales are slow because of a defensive posture..., born
from fear of a possible economic crisis in the country that
prefers to hold on to the physical product," said the Safras report.
Safras said all research shows large soybean stocks compared to the previous years. On July 1, Brazilian soy stocks stood at 24.8 million tons, up 24% from a year earlier.
Editors note: Richard Brock, Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
To see more market perspectives, visit Brock's Web site at www.brockreport.com.