Brazil soy sales below last year levels as farmers hoard crop

SAO PAULO (Reuters) - Brazilian farmers have sold about 58 percent of the projected soybean crop in the current season as farmers keep hoarding grains in hope of fetching better prices, according to a Monday report from consultancy firm Safras & Mercados.

At this time last year, producers had sold 76 percent of their output. The average for this period of the year is 74 percent, according to Safras & Mercados data.

The main factors driving low selling levels include prices below $10 per bushel in Chicago and a stronger Brazilian currency compared with last year, Luiz Fernando Gutierrez Roque, a consultant at Safras, told Reuters in a telephone interview from Porto Alegre.

In June 2016, some producers fetched more than 90 reais ($27.35) per 60-kilogram bag, or about $12 per bushel at the exchange rate of the time, but this is unattainable given current market conditions, he said.

Brazilian farmers are hoping that a climate event may cause crop failure in the United States, giving them a chance to sell at a higher price.

“But the strategy is risky as no climate event would mean U.S. farmers would harvest a full crop,” the consultant said.

Safras projects a bumper Brazilian soybean crop of 113.3 million tonnes for the current 2016/17 cycle. Based on this estimate, the total traded by the farmers until 5 June would be 66 million tonnes, the data show.

Reporting by Ana Mano and Roberto Samora; Editing by Steve Orlofsky