Morning Wrap up – Brz Ministry of Agriculture declared state of zoosanitary emergency

Brz Soybean Market: trades reported yesterday on FOB for June, July, and March shipments. For June, the day started low. Rumors of trades at -75n and -70n. Then confirmed trades at -69n, -65n, and -60n. Notice that premiums increased as futures reached highs on CBOT. In July, deals at -40n and then at -35n. Similarly to June, premiums rose following the upward trend in futures. Yesterday, farmer selling was weak. Agrinvest brokers mention 500-600k. Producers complain that the flat price didn't change - and it indeed didn't change. Trading companies defended the levels of flat price.

In CFR China, trades reported for June and JJ between 60n and 67n. They say Sinograin purchased 02 cargos for June. Trades reported at +90n for Aug shipment. The last trade for Aug was done three weeks ago at +20n. China will have great difficulty in meeting the demand for August and September. Brazilian trading companies are all heavily focused on corn logistics and origination - they say there are still many that are short.

Brz - CFR China: Offers for June at +67/69/75n and bids at 60n; for July, offers at +72/75/76 and bids at +70/68n; for Aug, offers at +90/95/100n and bids at +85n; offer for Feb at +125h, March at +92/95h, April at +85k, and May at +100k.

USA - CFR China: Offers out of PNW for October at +248x and USG at +238x; for November, indications out of USG at +230x and for Dec at +242x.

Replacement CFR: LH July out of USG at +210n and LH August at +210n. Brazil for Sep at +115n.

Brz corn Mkt: Farmer selling around 250k, and replacement in the 30'sCU. Agrinvest Brokers mentioned about new offers coming for June and July from the ports in the south, but the elevation is still limited from the northern arc. There are many swaps being offered on the Fob, but with few proposals and interests demonstrated. In general market is weaker for July and trying to hold for Aug on.

H5N1: Yesterday, the Ministry of Agriculture declared state of zoosanitary emergency throughout the national territory for a period of 180 days. This was due to the cases of H5N1 found in wild birds - there have been 8 cases so far, all in the state of Espírito Santo. Yesterday, I spoke with colleagues of the meat sector. Positive points: It shows that Brazil has strict protocols, with a 180-day duration, and the cases are in wild birds and not in commercial farms. It demonstrates that the sector in Brazil is organized and that measures are being taken to prevent contamination in commercial poultry. Negative points: Meat prices were rising in the international market, which opens up space for renegotiations. There may be cancellations, which in the short term would flood the domestic Brazilian market with more meat. However, this is something that all major players were already anticipating. Regarding the decrease in corn consumption, everyone believes it should not happen if the contamination does not reach the commercial farms.

BRAZILIAN CORN MKT
May 22nd
STS/TUB
JULY                                22* vs ??
LH July                           15 vs ??
AUG                                vs 35
FH/LH Sep                    50* vs ??
OCT                               50* vs 35
PAPER PAGUÁ
AUG                                32 vs 19
SEP                                 32 vs 19