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Brazil farmers speed up crop sales - US growers slow down

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Both Archer Daniels Midland and rival Bunge this week reported a boost to results from rapid crop sales by Brazilian farmers.

 

The extent of the speed-up is highlighted by ADM data showing 40% of 2020-21 soybeans hedged so far (with more than a month to go before the crop is even planted).

 

But even for 2019-20 crop, available in physical form rather than just on spreadsheets, growers are emptying their silos of soybeans, and corn too.

 

The acceleration reflects, of course, crop prices elevated in Brazil by the weakness of the real, which - at R$5.19 per $1 on Thursday - is down more than one-third against the dollar than this time last year.

 

That means far more reais per bag, bushel and tonne of the likes of corn and soybeans - traded internationally in dollars - than at last year’s exchange rate.

 

By contrast, US farmers, facing prices weakened by strong domestic harvest prospects, have slowed crop sales to well below average rates. Should they have made more of the early-July uptick in prices, following the weaker-than-expected US planting data?

 

 

Crop sales for 2020-21
Proportion of crop sold
Change on last year (percentage points)
Change on five-year average (percentage points)
Brazil - corn n/a n/a n/a
soybeans 40% +25 +28
US - corn 7% -6 -5
soybeans 9% +4 -6
Source: ADM

 

 

 

Crop sales for 2020-21
Proportion of crop sold
Change on last year (percentage points)
Change on five-year average (percentage points)
Brazil - corn 50% +6 +5
soybeans 93% +22 +18
US - corn 85% -10 -9
soybeans 83% -10 -13
Source: ADM

 

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