Oct 12, 2016
Brazil Farmers slow to Forward Contract 2016/17 Soy Production
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Brazilian farmers are slightly ahead of the average pace in planting their 2016/17 soybean crop with 11% planted compared to the average of 10%, but they are behind the average pace in forward contracting their anticipated 2016/17 soybean production.
According to the Franca Junior Consulting Firm, as of October 7th, Brazilian farmers had forward contracted 24% of their soybeans which is significantly slower than the 40% they had contracted last year at this time and the five-year average of 31%.
Brazilian farmers generally contract with grain companies or input suppliers to sell their grain in exchange for inputs needed to produce the crop. When commodity prices are low like they are currently, farmers are hesitant to lock in prices in the hope they will increase due to weather concerns later in the growing season.