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Forward sales of Brazil's 2019/2020 soyabean crop advanced 5 percentage points, surpassing the historical average for the period, driven by a favourable exchange rate and high port premiums, according to agribusiness consultancy Safras & Mercado on Friday.

Through October 4, Brazilian soya producers had traded 25.8% of the expected crop, which is projected at a record 125.75 million tonnes by the consultancy.

"In August and September forex and premiums helped a lot," Safras analyst Luiz Fernando Roque told Reuters.

Total forward sales for the current crop, which farmers are planting now, are about 3 percentage points above the historical average, according to Safras data.

While higher than the historical average, forward sales remain below last year's level, when the trade war between the United States and China favored Brazilian farmers.

At this time last season, forward sales of Brazilian soya was 27.3%, according to Safras, as producers were eager to sell the crop in advance to take advantage of record port premiums and a weakening of the Brazilian currency in the run up to Brazilian presidential elections.

Overall, the volatility related to the outcome of the global trade war, which in the past favored domestic grain growers in detriment of US rivals, remains a concern for local farmers.

"The uncertainty about the trade war is increasing, the market believes an agreement is close, and the risk to the (sales of the) Brazilian product is greater," Roque said.

If the US and China close a deal in 2019, demand for Brazilian soya may be impacted and prices paid to producers may fall, he said.

Copyright Reuters, 2019


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