January 21, 2015
Brazilian Farmers have sold 40% of their Soybeans, Sales Slowing
Brazilian farmers have forward contracted 40% of their anticipated 2014/15 soybean production compared to 50% last year at this time. Soybean farmers in Brazil have recently slowed down their selling pace due to a decline in soybean prices at the Chicago Board of Trade and the recent strengthening of the Brazilian currency.
Brazilian farmers are hoping for improved domestic prices due to either a reduction in the Brazilian soybean crop caused by the recent dry weather or premiums paid by buyers to entice farmers to let go of more of their crop.
Last week soybean prices for May delivery declined 5.5% at the Port of Paranagua and 3.7% at the Port of Rio Grande with prices ending the week at R$ 60.50 and R$ 61.50 per sack of 60 kilograms respectively. Prior to the recent declines, the prices at the ports were as high as R$ 70.00 per sack.
It is possible that the dryer than normal weather during January has trimmed the yields of the early maturing soybeans. Some regions of central and eastern Brazil have gone three weeks with any rainfall and farmers are worried about the impact of the dry weather on the yield potential of the early maturing soybeans.
The early 2014/15 soybean harvest has started in Brazil with 4% of the crop harvested in Mato Grosso and approximately 1% harvested in Goias, Mato Grosso do Sul, and Parana. Early yield reports vary widely in the range of 30 to 60 bu/ac. The soybeans being harvested now were planted during the second half of September and they were impacted by the dry weather during October. Soybean yields are expected to improve as the harvest progresses to soybeans that were planted after the rains returned to normal in early November.
Sales are expected to remain slow until the harvest pace accelerates during the second half of February and into March.