2006 was not so bad

2006 was not positive to the Brazilian soybean market. However, it was not so bad as the sector expected. The exchange rate keeps being the main problem, reducing domestic prices, in reals. Moreover, during the planting time, the devaluated Real kept boosting inputs prices, in reals.

Comparing the 2005/06 crop to the 2004/05 one, however, the exchange rate devaluated less. In the 2004/05 crop (average from August to November), the exchange rate was of 2.88 reals per dollar during the planting time and, in the harvest period, of 2.58 reals per dollar (down 10.52 percent). In the last crop (2005/06), during the planting time (average from August to November/05), the exchange rate was of 2.28 reals per dollar and, in the harvest period (March to May/06), of 2.15 reals per dollar (decreasing 5.53 percent).

The CEPEA/ESALQ Index averaged 13.00 dollars per bag of 60 kilos this year, down 9.49 percent over 2006's average. Prices decreased from January to April, recovering gradually until August and upped till the beginning of December. In trades between companies in the Parana state - represented by the soybean Index -, the soybean valuated 28.61 percent, from April (monthly averaged) to December (monthly average until Dec 21).

The support came from the international market: from CBOT and export premiums, which have kept positives during this year - due to the increasing global demand. At CBOT, soybean prices are up to 6.60 dollars per bushel.



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