South America Calling

Brazilian soybean sales remained behind schedule in May amid a slide in international price quotes.

As of May 31, Brazilian farmers had committed 68% of their recently harvested 2014-15 crop, up from 61% at the end of April, but back from the 75% sold at the same stage last year, according to AgRural, a local farm consultancy.

Business slowed as the Brazilian real strengthened in the first half of the month, which further depressed dollar-linked quotes, but the currency slid back in the second half of the month and some business was done.

While current crop sales are sluggish, farmers are getting ahead of the game for the upcoming 2015-16 season.

Forward sales of soybeans reached 6% of the next crop on May 31, up from 2% at the same stage last year. Sales were greatest in Goias at 12%, followed by Parana at 10%. In Mato Grosso, the No. 1 soy state, some 6% had been sold. Farmers reacted to a sharp decline in the Brazilian real during the last week of the month to fix part of their next crop.

In 2015-16, Brazil is expected to plant a soybean area that is equal or slightly smaller than the 78 million acres registered this season.

IN CONTRAST, SECOND CROP CORN HEAVILY SOLD

Sales of second-crop corn, which is just starting to come out of the ground, were slow last month.

But heavy forward sales in late 2014 and the first quarter of 2015 mean much more of the crop has been committed than is normal for this time of year, according to AgRural.

As of the end of May, farmers had sold 48% of the crop, up slightly from 44% in April but well ahead of the 27% sold at the same time last year.

Sales in Mato Grosso, the main second-crop state, reached 66%.

The pace of business slowed last month due to a slide in local prices as it has become clearer that Brazil will have a bumper second crop. In April, the 60-kilogram bag was quoted at R$15 for August delivery in Sorriso, Mato Grosso. That price has now dropped to R$12.50.

In Parana, the No. 2 state, farmers had sold 24% of their crop.

AgRural pegs the second crop at 49 million metric tons.

(CZ)

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