July 7, 2015

Brazilian Farmers have Sold 17% of their 2015/16 Soy Production

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

The recent price increase for soybeans has stimulated Brazilian farmers to forward contract more of their anticipated 2015/16 soybean production. According to AgRural, by the end of June Brazilian farmers had sold 17% of their anticipated 2015/16 soybean production. This compares to 6% sold by the end of May and 3% sold last year at this time. Brazilian farmers have also increased the sale of the 2014/15 crop to 77% sold compared to 81% sold a year earlier.

The most aggressive forward contracting has been in the center-west region of Brazil where farmers have sold 21% of their 2015/16 crop and 85% of their 2014/15 crop. The price of soybeans for February 2016 delivery in Sorriso, which is located in central Mato Grosso, reached R$ 58.00 per sack last week, which is R$ 6.70 per sack more than during the month of May. In Goias, soybeans sold for R$ 63 per sack for payment in April of next year and in Mato Grosso do Sul, they sold for R$ 61 per sack.

Farmers in southern Brazil have not been quite as aggressive in forward contracting their soybeans and they have sold 14% of next year's crop. Soybean prices in southern Brazil during June ranged from R$ 67 to 70 per sack for April delivery.

The biggest increase in forward contracting occurred in northeastern Brazil where sales of the 2015/16 soybean crop leaped from 2% at the end of May to 17% by the end of June.