Brazilian players are more and more optimistic about the profitability of the 2007/08 soybean crop. Prices have been reaching record values, while the cost of production has not been increasing at the same intensity. The good weather conditions should also contribute for the higher productivity.
The Brazilian export soybean prices in dollar from March to July 2008 are at between 25.70 dollars (March) and 24.70 dollars per bag of 60 kilos (July), the highest values. For the soy meal, quotations have oscillated from 320.00 dollars to 350.00 dollars per ton and for the oil, from 1,030.00 dollar until 1,050.00 dollar per ton, also record values. The support comes from the higher demand (domestic and international ones) that reflects on firm export premiums and increases at the CBOT.
In Brazil, prices also moved up during the first fortnight of December. The ESALQ/BM&F Index for the product delivered in the Paranaguá port valuated 0.5 percent in Real, closing at 44.11 reals or 24.55 dollars per bag of 60 kilos on Friday, Dec 14th. The CEPEA/ESALQ Index (Paraná state) increased 0.6 percent in Real, at 44.04 reals or 24.51 dollars per bag of 60 kilos.
Soybean costs of production are also enlarging, but at a lower intensity comparing to the prices. According to the Cepea, in most part of Brazilian regions, the costs of production (not considering the depreciation and capital opportunity costs) for the 2007/08 crop should increase between 8 and 12 percent over the previous crop. The main responsible for the higher costs should be the fertilizers and the gliphosate, which valuated between 25 and 40 percent over the previous season.
Regarding the planting, activities are concluded in Brazil - in some region of Mato Grosso state, the harvest should start at the end of this month.