December 4, 2013

Old Crop Soybean Prices in Parana Reach Highest Level this Year

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Farmers in Parana have now planted virtually all their intended 2013/14 soybeans and the crop is rated 98% in good condition and 2% in average condition. An estimated 11% of the crop has already started to flower. In addition to being pleased about the prospects for their 2013/14 soybean crop, farmers are also happy to see old crop soybean prices improving as well.

If farmers in the state still have any of last year's soybeans left to sell, they are very pleased with the recent prices. As of December 2nd, the average price for soybeans sold in the state of Parana was R$ 75.75 per sack of 60 kilograms (approximately US$ 14.90 per bushel), which is up nearly 2% in a week and the highest value thus far in 2013. Soybean prices in the state started out the year in the range of R$ 72.50 per sack (approximately US$ 14.30 per bushel) and they fell to their lowest point in April when they were selling for R$ 52.75 per sack (approximately US$ 10.40 per bushel).

New crop soybean prices are not as good as they were last year, but still very attractive at R$ 66.00 per sack last week or approximately US$ 13.15 per bushel. According to the Secretary of Agriculture in the state of Parana, farmers have forward contracted 20% of their 2013/14 crop, which is 15% less than last year at this time, but about equal to the long term average.

Brazilian farmers in general remain cautions sellers of their 2013/14 soybean crop. The consulting service Safras e Mercado reported that as of last week Brazilian farmers had sold approximately 33% of their anticipated record large soybean crop, which is 15% less than the 48% sold last year at this time. These sales figures are only 1% higher than those of a month earlier.

In Mato Grosso approximately 44% of the 2013/14 soybean crop has been sold compared to 64% sold last year at this time. In November of 2012, farmers in Brazil were more aggressive in their forward contracting due to near record high prices resulting from a drought plagued crop in the United States.