CHICAGO, May 18 (Reuters) - Brazilian farmers are rushing to sell soybeans after a 7 percent drop in the real currency made their supplies more affordable than exports from the United States.
Farmers in Brazil, the world's second-biggest producer of soybeans after the United States, were selling beans on Thursday that had been locked up in storage bins for weeks because the currency's strength had weighed on prices. The sales will likely shift attention of global soybean importers away from the United States, analysts said.
But the decline in the real, on fallout from allegations that Brazilian President Michel Temer condoned bribes to silence a witness in a corruption probe, sparked an increase in cash market sales in Brazil on Thursday.
"The farmers in Mato Grosso are selling, taking advantage of a rise in price," said Endrigo Dalcin, president of soy growers association Aprosoja in the state of Mato Grosso, which accounts for almost 30 percent of Brazil's soy production. "Some producers are getting 3 to 4 reais more for the bag today."
Farmers, who have boosted their on-farm storage capacity in recent years, had delayed selling the newly harvested soybeans. Independent consultancy Safras & Mercado said that Brazilian farmers had sold just 50 percent of their crop by May 5, down from 67 percent a year earlier and below the five-year average of 65 percent.
"The big story in Brazil was, When would they sell?" said Soybean & Corn Advisor President Michael Cordonnier, an agronomist and expert on South American crops. "Now, with this much of a drop, this will incentivize Brazilian farmers to sell soybeans."
The country movement in Brazil will slow the flow of U.S. soybeans headed overseas, analysts said. Exporters had been leaning on the U.S. market for more soybeans than usual this year - with total marketing year export bookings for U.S. soybeans up 22 percent from a year ago - as Brazilian farmers put off booking sales.
But Brazilian supplies now will shoulder more of the export burden as soybeans that had been squirreled away begin to arrive at ports.
Chicago Board of Trade soybean futures plunged 3.2 percent to their lowest level in nearly a month on expectations of a wave of cheaper Brazilian soybeans hitting the global market.
The quick turnaround in farmers' attitudes about sales shows that grain handlers will have to be nimble to keep up with farmers' marketing practices.
"It is very fluid," Soren Schroder, chief executive of grain merchant Bunge Ltd, said at an industry conference in New York. "We cannot plan our future success on whether the farmer sells on any given week or not." (Additional reporting by Julie Ingwersen in Chicago and Ana Mano in Sao Paulo; Editing by Leslie Adler)