April 1, 2015

Weak Currency Stimulates 2014/15 and 2015/16 Soy Sales in Brazil

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

The Brazilian currency finished last week trading at 3.24 reals per dollar which was the weakest it has been in about 12 years. The weaker Brazilian currency and subsequent higher domestic prices have stimulated soybean sales in Brazil for both this crop and next year's crop as well. According to a report released by AgRural last Friday, the 2014/15 soybean crop in Brazil is 53% sold which is 10% behind last year's selling pace. At the end of February, Brazilian farmers had sold 40% of their crop which at that time was17% slower than last year.

In the center-west region of Brazil (including the states of Mato Grosso, Mato Grosso do Sul, and Goias), the 2014/15 soybean crop is 62% sold and it is 40% sold in southern Brazil (including the states of Parana, Santa Catarina, and Rio Grande do Sul). The soybean harvest is nearing completion in the center-west region while it is still ongoing in southern Brazil.

Brazilian farmers have taken advantage of the improved prices to also start forward contracting their 2015/16 soybeans as well. By the end of March, Brazilian farmers will have forward contracted 2% of their anticipated 2015/16 soybean crop. Last year, farmers in Brazil did not start forward contracting their 2014/15 soybean crop until May.

Farmers in Parana have sold 5% of their 2015/16 crop with 3% sold in Goias and Mato Grosso do Sul. In Mato Grosso, which is the largest soybean producing state in Brazil, farmers have sold 2% of their 2015/16 crop and 1% has been sold in Rio Grande do Sul.