May 8, 2012

Soybean Sales Continue at Accelerated Pace in Mato Grosso

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

According to the Mato Grosso Institute of Agricultural Economics (Imea), as of the end of April, farmers in the state had sold 86% of their 2011/12 soybean crop, which is 5% more than last year at this time. Farmers in the western part of the state have been the most aggressive with 92% of last year's crop already sold.

Farmers all across Brazil are taking advantage of record high soybean prices. The soybean prices are strong not only due to the international demand for soybeans, but also due to a weakening of the Brazilian currency in comparison to the U.S. dollar. The Brazilian currency continues to weaken and it is currently trading at 1.92 to the dollar. Since soybean prices are set in dollars but paid in the local currency, a weakened Brazilian currency is the same as a price increase for Brazilian farmers.

Everywhere in the state of Mato Grosso soybeans are being sold for more than R$ 50 per sack of 60 kilograms. As of last Friday, soybeans in Primavera do Leste, which is located in the southeastern part of the state, sold for R$ 53.50 per sack. In Diamantino located in central Mato Grosso, they sold for R$ 52.00 per sack and in Sapezal located in western Mato Grosso, they sold for R$ 51.50 per sack.

The president of the Mato Grosso Soybean and Corn Producers Association, Marcelo Duarte, feels that the accelerated pace of soybean sales illustrates that Brazilian farmers realize that soybean prices do not continue to rise unabated forever and that now is the time to lock in profits instead of waiting for even higher prices.