Oct 15, 2020
Forward Contracting of Grain at Record Pace in Mato Grosso
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Farmers in Mato Grosso had sold 60.4% of their anticipated 2020/21 soybean production by the end of September compared to 36% last year and 33.4% average according to the Mato Gross Institute of Agricultural Economics (Imea). This represents an advance of 4.5% for the month. Sales of the 2019/20 soybean crop is essentially complete at 99.3%.
Imea reported that farmers in Mato Grosso have forward contracted 54% of their anticipated 2020/21 corn production compared to 42% last year and 32% average. They have also forward contracted 2% of their 2021/22 corn production which will not be harvested for almost two years. Sales of the 2019/20 corn production is 95% complete.
The average price of the forward contracts for corn in September was R$ 46.74 per sack (approximately $3.95 per bushel), which was up 16.5% compared to the prior month. The current spot price for corn in Mato Grosso is R$ 53.00 per sack (approximately $4.45 per bushel), which is up 3% from the prior week.
The state of Mato Grosso is Brazil's largest producer of soybeans, corn, and cotton.