Sep 10, 2015
Farmers in Mato Grosso do Sul have sold 27% of 2015/16 Soy Crop
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Farmers in Brazil will start planting their 2015/16 soybean crop next week if there is enough soil moisture to insure germination and stand establishment, but producers in Mato Grosso do Sul have already sold 27% of their anticipated production for delivery starting in February of 2016. This is nearly three times faster than the historical average for forward sales at this time of the year which is between 8% and 12%.
The accelerated sales pace is in response to the significant weakening of the Brazilian currency which has devalued more than 40% since the first of the year. In recent days the currency has been trading in the vicinity of 3.8 reals per dollar. The result has been improving domestic prices for grain at the same time that international prices have been weak.
Farmers in the state have sold 83% of their 2014/15 soybean production which totaled 7.08 million tons in the state. Delaying sales of last year's crop was the correct marketing strategy this year since domestic soybean prices have been gradually increasing as the currency has weakened. Farmers have also taken advantage of the improved corn price to forward contract 12% of next year's anticipated safrinha corn production. The 2016 safrinha corn will be planted next February and March and harvested next July and August.