News in brief:
-Â Dry weather conditions in Brazil’s Mato Grosso state have raised concerns about soybean yields, leading farmers to hold back on forward sales.
– Forward sales of soybeans and corn in the state were lower than average in October, compared to numbers from the past five years, reflecting the cautious outlook for the crops.
Farmers in Brazilâs largest agricultural-producing state, Mato Grosso, have been holding back on forward sales of soybeans in October due to uncertainties surrounding the cropâs yield.
Forward sale is an agreement between a farmer and a buyer to sell their crops at a predetermined price and delivery date before the crop is harvested.
A news source said that the state has been experiencing low rainfall volumes and excessive heat since the beginning of the planting season. Already, there are reports that they may need to replant some areas.
As a result of these challenges, farmers are waiting for a better picture of crop conditions before committing to larger sales volumes, according to IMEA, the stateâs agriculture institute.
Forward sales for new crop soybeans reached 31.7% in October. While this represented a 2.8% increase from the previous month, it is still lower than the average for the past five years. It is the same story for corn as forward sales trail recent annual performance.
Average prices increased for both crops in October as 2022/23 prices jumped by 0.9% and new crop grew by 1.7%, compared with average September levels. In addition, forward corn sales for the 2023/24 marketing year increased in October, which is attributed to a rise in prices.
However, new crop sales remained 24.7 points behind the previous five-year average and 4.9 points slower than in the previous season.
Overall, the forward sales data for Mato Grosso soybeans and corn in October suggests that farmers are cautious about the outlook for the crops.
The stateâs dry weather conditions have raised concerns about yields, and this is reflected in the relatively low levels of forward sales.
