Thursday, March 02, 2017

Retraction in sales of soybeans and corn in Brazil export threat presses tradings

SAO PAULO-the reluctance of farmers to sell soybeans and corn in Brazil in the current crop jeopardizes the most optimistic predictions of exporting country and has made multinational trading companies pay expensive to complete ships at the beginning of the season of shipments.
What could be easier from the standpoint of the offer--with a record harvest of more than 100 million tons of soybeans in the biggest global exporter--has been complicated for now, with international prices in Chicago (CBOT) and the appreciation of the real against the dollar discouraging sales of producers in Brazil.
Thus, large trading companies exporters have faced difficulty to fulfill export contracts already signed soy, paying high values for the product for prompt delivery to complete loads of vessels are reaching Brazilian ports, said traders.
"The market is nervous. The line up (of ships) is crowded and cargo in ports is missing. The producers are not securing (contracts) and the Exchange and CBOT just worsen the situation. The trading companies are paying dearly for soybeans in the spot market, "said agribusiness and logistics consultant Luiz Claudio Santos, with extensive experience in the commercial area in several trading companies.
The situation gets even more delicate in a time when heavy rains caused bad spots on the unpaved stretch of the BR-163, are preventing the soybeans come to ports in the North of the country, resulting in losses of $400,000 a day, with the impossibility of embarking the product, reported on Friday the association representing the oil industry in Brazil (Abiove).
Among the major trading companies operating in the country are American companies like the Bunge, ADM, Cargill, Louis Dreyfus in addition to French and Chinese Cofco.
"You don''t have any margin (in price) to take to export," said an analyst of a trading market intelligence, explaining that the agribusiness multinationals are not able to make a profit, at least in this first moment of brazilian exports.
"The trading companies usually sort these things. Sell with negative margin ", completed a senior operator of another major grain exporting company.
Faced with the difficulty of lead to grain, with the brazilian crop still in the initial stage, at about 20% from the area until the middle of the month, exporting companies are avoiding closing new business for later in 2017, believing that the market can promote them later, with the entry of the crop from Argentina or an increase in planting in the United States.
"Other additional applications you just not picking up or moving to other sources (other countries)," said the first source.
LATE SALES
Farmers have avoided selling soybeans and corn of the harvest of summer--that are in the process of harvesting--and close deals with the winter harvest corn, being sown, due to the fall in the share price.
The indicator Esalq/BM & FBovespa, which tracks the prices of soybeans in port of Paranaguá, is quoted at about real/72 sack, with indentation of more than 25% registered a peak in June last year.
In this scenario, the producers '' sales reached 37% of total soybean crop until early February, after the 49% of a year ago and the 44% of the five-year average, according to data from France Junior consultancy.
For the so-called "winter harvest corn", which is about two-thirds of the national harvest, the commitment expected harvest, 17% reaches compared with 41% a year ago and 26% of the historical average.
COMPLICATED LOGISTICS
Delays in business and exports can also cause turbulence in the logistics chain in the coming months.
The Brazil has high your export capacity gradually, with opening of new port terminals, mostly in the North of the country.
However, the ability has no time off to accommodate a late soybean exports, which usually occur in the first half and give space to the corn shipments.
"I''m worried, because of our limitations in terms of logistics," said the Director-General of the National Association of exporters of cereals (Anec), Sérgio Mendes.
"If you delay the marketing, you have to make the volume go out during the year. If the marketing start getting in the way, soybeans end up prevailing over the corn, "said the Executive, pointing out that the cereal is the most threatened if any port bottleneck.
The experts also said that as the second half progresses, the Brazilian shipments are at risk of competition with the United States '' crop, which is harvested closer to the end of the year.
DCI - 24/02/2017
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