Nov 26th blog update

Everything is peachy.

Nice general rains from time to time.

There are a few problem spots, but in the whole scheme of things, minor.

Argentina sure has had their share of problems.

The past two years were floods. A very cool spring time with snow.
Lately Cordoba state has been dry.
On Nov 24th, they had a fairly serious frost in Buenos Aires province.
Very very strange weather.

Does this prelude to El Nino or a dry 2018?
I do not know.

Brazilian farmers in the south talk about when the season starts
with weather coming out of the south, it is never a good year.

I think for the next 4-6 weeks, we sit back and relax.
If there are going to be problems, they will manifest from February onward.

Much talk this past week about railroads in Brazil. Much of this is political.
I have sent out special report in December newsletter to subscribers pulling all
the data points together from the past year.

BNDES showed a 25% increase in machinery loans in 2017. This is the same
number John Deere published last week as per increase in South American sales.

I am looking at a 10-15 million ton pullback in BR corn production. First crop
will come in 5-6 mmt less than last year. 2nd crop will come in 10 mmt light.

I expect a reduction in BR corn exports for 2018.

Soybean crop remains a 110 mmt potential. The range could be anywhere
from 105 to 115 mmt. A crop size less than 106 mmt would be bullish.
A crop size above a 110 mmt is bearish.

FX sunk last week to 3.22:1 down from 3.30:1 on the idea they have cut some
spending for the 2018 budget.

I still think political risk for FX is a factor for 2018.

Dollar: Real FX trading less than 3.20:1, bullish for soybeans.
Dollar:Real FX greater than 3.30:1 bearish for soybean prices.  (CME)

Keep an eye on November continuous soybean chart.
Last week's SX18 high was 10.09 1/2. That shows higher highs
and looks constructive. I think there are some hints in the SX18 chart to
give us hope.

(Previous highs basis SX17 were 9.94 and 10.03) If we can trade 10.15
or 10.17 1/2 basis SX18, that would be a positive nugget for the future.
(2018)

If we go down and trade 9.80 or close below 9.60 basis SX18- look out below.

But for the next few weeks, I expect sideways to lower prices.
Early 2018 should be a low.

Happy Holidays from Brazil,

Kory

keywords: BR railroads, climate, BR soy and corn production, soybean prices, machinery sales

Nov 4 blog update

In memory of Andre Luft.

I learned yesterday a day a friend of mine had passed away. I cannot say we were close.
We kept in touch and Andre would help me from time to time with a project or tour etc.

Andre was a giant of a man. He was almost 7 feet tall. Gentle as a lamb.
He spoke perfect English. He was well educated and always looking for
opportunities and adventure. He left behind his wife and two sons. His mother
is a renowned author in Brazil. I believe his son's are studying abroad in California
and New Zealand.

Andre passions were agriculture and surfing. He had managed farms in Bahia, worked
in the seed business for sweet sorghum for ethanol production. The last three years he
moved to Mozambique with his wife. They worked for group setting up a farm from scratch
there. From nothing to something. They literally had to build their own semi-mud hut to
live in when they got there. Today there are houses, silos, machinery, corn, soybeans,
edible beans, and sunflowers growing.

He did not need to this project in Mozambique, he wanted too !!!!

He wanted to see where life would take him.

He loved to surf. In the last couple months he did return to Brazil
for heart surgery. He was given the OK to be physically active again.
He grabbed his surf board and headed to the beach in Mozambique.
It is there his heart gave out. He died doing what he loved the most.
Surfing!!!
Andre Luft left us at 51 years old. Too young

When I think of the size of Andre, I told myself this must be what
Zeus looks like. Hands that were huge and a heart even bigger.

His facebook page in Mozambique below:

https://www.facebook.com/groups/1457352237853736/

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Rains have returned to the dry areas. We are still below normal, but planting
is zipping along now. Parana is too wet and that looks to continue.

Dollar:Real is 3.30:1

This is increasing soybean sales.
Soybeans are now at a higher price than they were in July at the peak.

Soybeans were down 11 cents and with FX up 4 points Friday, the
cash prices in Brazil actually went up.

From what I read, it looks like a 2nd corn ethanol mill will be built
at Sinop, MT. Ready July 2019. Paraguay group

Lots of talk about railroad concessions for 2018.
2018 is an election year so there will be much talk about
projects again. Let us keep an eye as to where the boots on the
ground are. At this point it is the BR military on BR 163 in Para state.
Paving crew is installed and they are hiring workers from the area to
run graders  etc. One problem, the rainy season now starts !!!!

2018 proves to be interesting here.

50% of the population want Lula in jail. 50% of the
population want him back as President.

The next most popular guy is Bolsonaro. Very far right.
Wants everyone to have a gun.

Many candidates in between.

Unless I start to see soybeans on fire, I will not worry too much
about Brazil bean crop in coming months. Big area planted with
lots of fertilizer. It was planted late so results will be different
than last year.

February is crucial for 2nd crop timing and harvest of
1st crop. We don't have any more days to burn because of rain
delays for example.

I also read that Maranhao state is having some financing issues.
Less soybean area and less fertilizer on some areas. Nominal area,
but these are carryover problems from the 2015-2016 drought
that still linger in frontier areas. Last year did not heal all wounds.

Thank you for all the renewals the past month.
Newsletter and VIP level. All are appreciated.

Keywords: Andre Luft, soybeans, railroad, BR 163, politics, corn ethanol,
   dollar:real FX