Soybean Prices Below Cost of Production In Brazil - Cordonnier
According to respected private analyst Michael Cordonnier, the cost of soybean production in Brazil is now higher than the current market price of beans.
In his weekly newsletter he says that input prices are up 43 percent from a year ago as of Sept. 1, whilst selling prices are down some 46 percent since June this year.
Cordonnier quotes a Mato Grosso ag economic institute that calculated the cost of production for soybeans in that state was in the region of $8.27 to $9.19 per acre, assuming yields of 43.5 bpa; given costs of getting those beans to a crusher or export facility of $2.50 to $3.25, breakeven is someplace between $11 to $12.50, well below last night's May 09 futures close of $9.27 3/4.
Despite the current price disparity Brazil is still expected to produce a crop of around 60mmt in 2009, similar to that of 2008.
In his weekly newsletter he says that input prices are up 43 percent from a year ago as of Sept. 1, whilst selling prices are down some 46 percent since June this year.
Cordonnier quotes a Mato Grosso ag economic institute that calculated the cost of production for soybeans in that state was in the region of $8.27 to $9.19 per acre, assuming yields of 43.5 bpa; given costs of getting those beans to a crusher or export facility of $2.50 to $3.25, breakeven is someplace between $11 to $12.50, well below last night's May 09 futures close of $9.27 3/4.
Despite the current price disparity Brazil is still expected to produce a crop of around 60mmt in 2009, similar to that of 2008.
