USDA confirmed a larger 2006/07 soybean crop production in the United States. However, the increase should not be as expressive as it was projected. This information gave support to the futures in Chicago Mercantile Exchange (CBOT). The values in CBOT are around 6 dollars per bushel for 2007.
In Brazil, soybean cultivated area in 2006/07 should reduce from 5.1 to 7.6 percent in relation to the previous season, according to the National Company for Food Supply (Conab), totaling between 20.53 and 21.10 million hectares. The projection only confirms what market expected - a reduction below 10 percent.
The total production should increase from 53.54 to 55.03 million tones, supported by the better productivity in the Southern area, which was affected by the dry weather in the last years.
Planting activities are just starting in Center-Western region and have not started yet in the South. It means that the Conab's projection can change depending on the economic scenario during this month.
In the domestic market, prices keep moving up, supported by the increasing futures in CBOT and higher export premiums in Brazil. The CEPEA/ESALQ Index closed at 14.47 dollars per bag of 60 kilos this Wednesday, Oct 18, up 9.62% in relation to September 29.