December 27, 2013
Brazilian Farmers have sold just 33% of their New Crop Soybeans
Even though soybean prices remain relatively attractive for Brazilian farmers, they continue to be slow sellers of their anticipated 2013/14 soybean production.
According to the consulting firm Safras & Mercado, farmers in Brazil have sold approximately 33% of their 2013/14 soybean crop which is behind last year's sales pace of 48% during the same period. In the number one soybean producing state of Mato Grosso, farmers have sold 42% of their soybeans compared to 66% last year. In the second largest soybean producing state of Parana, the selling pace is even slower. Parana farmers have sold just 19% of their 2013/14 soybean crop compared to 32% last year.
Not only are they slow sellers of the new crop soybeans, they still have some of last year's crop to sell as well. Brazilian farmers have sold 95% of their 2012/13 production which means they still have approximately 4 million tons of soybeans to market. Last year at this time, Brazilian farmers had sold 98% of their previous crop.
Soybeans in Parana are currently selling for approximately R$ 70 per sack of 60 kilograms or approximately US$ 13.80 per bushel which is sufficient to generate a profit of about R$ 1,500 per hectare or US$ 264 per acre.
Sales during the Christmas and New Year holiday season are generally slow in Brazil, but they have been extra slow this year because farmers are waiting and hoping for improved soybean prices. Strong demand from China has supported prices and farmers are waiting to see if emerging weather concerns especially in Argentina might spur prices even further.
Brazilian farmers have had several good years in a row and the correct marketing strategy during that time was to wait for improved prices either due to weather problems in the U.S. or in South America. Brazilian farmers seem to be following the same strategy again.