Number of futures contracts of oxen has 53.8% drop in April

São Paulo-With the price of arroba spinning in high, around 155 R$, producers of oxen has reduced its operations in the futures market and opted increasingly for physical sales.
According to data of the São Paulo Stock Exchange (BM & FBovespa), 22,657 contracts were traded in April this year, 53.8% drop compared to March, with 57,652 contracts.
To the Managing Director of the consulting firm Markestrat, José Carlos de Lima, the low pace of future sales is the result of high domestic demand for meat and greater number of slaughterings, including females, in 2011/2012.
That reduced the supply of available animals, which caused the high price of arroba and causes producers to negotiate more in the physical market.
"With the production more expensive, this reflects the natural occurrence of caution from the producer in the re-composition and agricultural investment," analyzed file to DCI.
There were more negotiations last March with March 2015, when 44,606 contracts were closed.
"The cattleman usually use the futures market to make sure that you will make a profit. Having the value of arroba considered good, opts for physical market, "said an analyst at Scot Consultoria Isabella Camargo.
However, in the same month of 2014 were closed 85,634 futures contracts, which indicates a tendency to fall in this type of operation in the long term, according to market analyst of the consultancy Market, Fernando Iglesias & Vintages. "There is a reduction in the volume of business since 2010. Is little liquidity, does not have a volume of hedge in the market, "he said.
He explains, however, that with the beginning of the off season in July, this is also the effect of seasonality. "It''s a maturity that gets more limited and results in lower volume of business than in other months," she said.
Corn
One of the current problems in the industry is the high price of corn, the main feed for the agricultural sector. The obstacle is that domestic production can not supply the demand in the domestic market and export.
As he showed the DCI in the last week, at the beginning of the year, the value of the sack of corn were at r $ 25. However, with the drought that affected several crops, the price has gone up and now exceeds 40 R$.
"The price is formed by two inputs: soybeans and corn. With the value of the price, the producers opted to replace grain corn for soybeans. This made the offer of corn fell in 2014/2015, charge much meat production ", he pointed out, the Markestrat File.
"This year has been terrible for farming, pig farming and also for the confinement of the oxen. Is the main villain of the activity in 2016. Many producers on beef cattle and hogs have abandoned because of this activity, "said an analyst at Vintages & markets.
Export
The good prospects for keeping prices heated meat exports, driven by the devaluation of the real against the dollar, which reached r $ 4.
Iglesias is quite optimistic for exports, even with this minor exchange parity. That would change only if real, if value to R $ 3-What is unlikely in the short term.
"The price is in great level. Exports leave the smaller stocks in the domestic market, allowing prices to rise in a way that is out of control, "said Iglesias.
The analyst at Scot Consultoria says that right now the trend is to reduce the volume of slaughter to curb a price drop.