October 20, 2011

As Much as One-Third of Brazil's Soy Crop Already Sold

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

Farmers all across Brazil took advantage of the strong soybean prices and a weaker Brazilian currency to forward contract more of their anticipated soybean production than ever before. It is estimated that as much as one-third of the 2011/12 Brazilian soybean crop has already been sold.

The farmers in Mato Grosso are usually the leaders in forward contracting their soybeans, and true to form, they have already sold 48% of their anticipated crop compared to 36% last year at this time. In the state of Parana, it is estimated that 25% of the crop has been sold and in Rio Grande do Sul, approximately 20% has been contracted.

Farmers who forward contracted their soybeans are very pleased because they have now locked in good margins for their crops. Pricing for the soybeans was extremely good and some farmers sold their soybeans for as much as R$ 50 to R$ 51 per sack. Many of the farmers forward contracted their soybeans in exchange for the inputs needed to produce the crop and there are numerous reports that farmers invested heavily in the hope of increasing their productivity. In central Brazil, fertilizers are a key component in soybean productivity and fertilizer sales should hit record levels in Brazil this year.