Brazil increases its advantage in beans exports

Soybean FOB prices to delivery by the Paranaguá port have been increasing for almost one month in a row, confirming the good global demand by the Brazilian product. Between Aug 31st and Sept 14th, values upped 7.6 percent for shipping in October, reaching 22.10 dollars per bag of 60 kilos, the highest price since the beginning of 2004. The increase was linked to the higher quotations at the CBOT and to the firm premiums.

According to the USDA (United States Department of Agriculture) report, published on Sept 12th, the North-American exports should reduce 12.6 percent in the 2007/08 crop over the previous one, totaling 26.54 million tons. For Brazil, exports should increase 27.4 percent, reaching 30.7 million tons.

Regarding the Brazilian soybean cultivated area and the production, the Conab (National Company for Food Supply) shows also an increase in the 2007/08 crop. The area should be from 4 to 9 percent higher. The production, in turn, should rise with less intensity (between 1.3 and 6 percent), due to the risk of a lower productivity.

The CEPEA/ESALQ Index (Paraná state) closed at 38.61 reals or 20.31 dollars per bag of 60 kilos on Sept 14th, upping 5.7 percent in Real over Aug 31st.

Brazilian soybean and corn growers should get better remuneration in the 2007/08 crop over the previous one, which had already been marked by higher prices. For the soybean, the cost of production should reduce 2.2 percent in the 07/08 crop season. Regarding the corn, it should increase roughly 10 percent. These results are linked basically to the costs of fertilizer and chemicals.

Based on current prices and costs, profits are of 46 percent for the soybean and of 79 percent for the corn, against 6 and 21 percent, respectively, in September 2006. In the first time, it shows a higher advantage for the corn in relation to the soybean. However, it is important to consider other positive factors to the soybean against the corn, like the easy commercialization during all year, the lowest cost per hectare and different alternatives of financing. In this context, the soybean area should remain stable in the 2007/08 crop. The corn area is expected to increase a little, though.


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