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A More-than-ten-members Brazilian agricultural delegation, consisting of Brazilian Confederation of Agriculture, Agriculture trading houses, cattle raising companies, visited Dalian Commodity Exchange(DCE). The delegation exchanges information with the representative from DCE, Chinese futures industry and trading company.
According to Dr. Li Xiaoyue from Fcstone, the organizer of the delegation, the Chinese demand for soybean in the near year grows quickly as the economy develops steadly.As the main supplier of China soybean importing, Brazil would like to learn the soybean crush and demand situation in China. Had visited some soybeans crush and trading companies of Cofco and Chinatex in Beijing, the delegation visited DCE for studying the roles of DCE in soybean pricing in China.
During the seminar, the representatives from the delegation answered the questions the Chinese representatives care about. A member of the delegation said, If the CBOT soybean price is above 830cent/bushel, the planting acres of Brazilian soybean will increase about 5%. But he also emphasize that what the peasants of Brazil care more about the USD/Brazil Currency exchange rate and the local basis change than the absolute price in CBOT. If US Dollar keeps strong, the Brazilian planting acres will increase more. Regarding the effect of crude oil price change on the soybean planting cost, the member said that the Brazilian government pays the allowance for energy consumption and oil price has little effect on the soybean cost. At the same time, most sugarcane planters signed a four-year long term supply contract, so there is little possibility that the sugarcane planters will convert to plant soybean as the price goes up.
About the corn planting situation in Brazil, the member said when the price of corn is higher than 400 cents/bushel, the peasants in Brazil would like to plant corn regardless the price ratio between corn and soybean.
The two parties discussed the soybean option contract, the price ratio of GMO soybean and non-GMO soybean, the soybean price relationship between DCE and CBOT and the operation of DCE.
