Dec 12, 2019
Attractive Prices Encourage Brazilian Farmers to Sell their Grain
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Attractive domestic grain prices in Brazil continue to encourage Brazilian farmers to sell both their old crop and new crop grain production. The attractive prices are the result of tight supplies, strong domestic demand, and a weaker Brazilian currency compared to the U.S. dollar.
According to the Mato Grosso Institute of Agricultural Economics (Imea), farmers in the state have sold 98.7% of their 2018/19 old crop corn production at an average price last week of R$ 30.43 per sack (approximately $3.40 per bushel). For the new crop 2019/20 safrinha corn, which will be planted early in 2020, farmers are forward contracting their corn at R$ 23.50 per sack (approximately $2.60 per bushel). These are very attractive prices considering that the cost of production for safrinha corn in Mato Grosso is in the range of $2.00 to $2.50 per bushel.
For old crop soybeans in Mato Grosso, farmers have sold 99% of their 2018/19 production. For their new crop 2019/20 soybean production, farmers have sold 51% of their anticipated production, which represents an advance of 7% for the month of November. The average new crop soybean price during November averaged R$ 71.13 per sack (approximately $7.90 per bushel).