Apr 13, 2020
Brazilian Farmers Aggressively Selling their Crops
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Brazilian farmers took advantage of record high domestic grain prices during the month of March to sell a record amount of their 2019/20 soybean and corn production. According to Flavio Roberto de Franca Junior from the consulting firm DATAGRO, as of April 3rd, Brazilian farmers had sold 71.5% of their 2019/20 soybean production comparted to 51.8% last year and an average of 53.5%. This represented an advance of 13% in one month. The prior record for soybean sales during March was 59.5% set in 2016.
Domestic soybean prices in Brazil hit record high levels during March driven mainly by the sudden devaluation of the Brazilian currency that at one point, was trading at 5.5 Brazilian reals per U.S. dollar.
Not only did farmers sell a record amount of their 2019/20 soybean crop, they also forward contracted a record amount of their 2020/21 soybean production as well. As of early April, Brazilian farmers had forward contracted 19.9% of their anticipated 2020/21 soybean production compared to 5.0% last year and 3.8% average. The prior record was 8.0% set in 2016.
Corn prices in Brazil were also record high during the month of March and farmers took advantage of the prices to move a lot of their corn as well. By early April, Brazilian farmers had sold 43.8% of their full-season corn compared to 32% last year and 32% average. At the beginning of March, farmers had sold 23% of their 2019/20 full-season corn production. Domestic corn prices in Brazil during March increase in the range of 5% to 11% depending on location.
Farmers in southern Brazil are currently harvesting their full-season corn which represents approximately 24% of Brazil total corn production. The full-season corn is mainly produced in southern Brazil and used for the livestock industry which is concentrated in southern Brazil.
Brazilian farmers have also forward contracted 54% of their anticipated 2020 safrinha corn production compared to 39% last year and 37% average. The largest safrinha corn producing state is Mato Grosso and farmers in the state have already forward contracted more than 80% of their anticipated production.
In Mato Grosso more than 90% of the safrinha corn was planted within the ideal planting window and the weather in the state has been beneficial for the crop. Farmers in Mato Grosso are confident enough about their anticipated production that they have already sold more than 80% of their anticipated production. The safrinha corn harvest will start in Mato Grosso in late May or early June.