Brazilian Farmers only sold half of 2016/17soybean crop

Brazilian farmers continue to be slow sellers of their 2016/17 soybean crop with only 50% the crop sold according to Safras & Mercado. This compares to 67% sold last year at this time and 65% average. Nationwide, the soybean selling advanced only 4% over the past month. Farmers in Mato Grosso lead the way with 62% of their soybeans sold compared to 70% last year at this time. Safras & Mercado is estimating the Brazilian soybean crop at 111.5 million tons.
 

It has been reported for many weeks that local soybean prices in Brazil are very low and in many locations, the prices are approximately equal to or below the cost of production. Farmers are very reluctant to sell at these prices and they are waiting for a weather problem to develop in the U.S. that could result in higher prices.
 

Soybean prices improved somewhat in Brazil last week, which spurred some selling, but the sales pace is still very slow. Interior prices in Brazil range from R$ 50.00 per sack ($7.33 per bushel) to R$ 67.00 per sack ($9.82 per bushel).
 

Grain merchants in Rio Grande do Sul have reported that they have never seen such slow selling in 40 years. Farmers in the state say they will not sell their soybeans for less than R$ 70.00 per sack ($10.26 per bushel), but local prices are in the range of R$ 57.00 to R$ 58.00 per sack ($8.35 to $8.50 per bushel). In western Parana soybean prices improved slightly last week to R$ 65.00 per sack ($9.53 per bushel), but that is still well short of last year when the price was R$ 78.00 per sack ($11.43 per bushel).
 

Brazilian farmers are pinning their hope for higher soybean prices on two potential developments. The first is the development of a weather problem in the U.S. over the next few months that could push prices higher. The second is the weakening of the Brazilian currency compared to the U.S. dollar. Last year at this time, the Brazilian currency was trading at approximately 3.55 per dollar and currently it is trading at 3.17 per dollar. It is uncertain if either of those developments will actually occur.