Monday, October 27, 2014

Moving forward

I must say that I had a good belly laugh when I saw this image today.

No much to say about election. I am speechless.
One person summed it up well last night. Brazil gets the government she deserves.

The Real will be weak which will help save the Brazilian soybean farmer in early 2015.

Planting progress will now kick into high gear. I hear about problems in Parana and Mato Grosso.
There are always some.

I will be in Mato Grosso in November.

As the Dollar/Real ratio widens, there will be opportunities for foreign
investors that are quick on their feet.

We have seen this before. We need to go through some convulsions but Brazil
will be Brazil. Protests, strikes, corruption, steal a little here and there, kick back to
a few friends and before you know it we will have a new railroad. It is all about
positioning and now we have the correct people in place to get that done. The previous
four years was prep for the next four years. It has taken me a long time to get that
into my Gringo skull. It was kinda thick, now, it is more pliable.

It is hard for a Northern Hemisphere person to grasp what goes on in the minds
of a Latin American country citizen. What one populous would impeach a President for, a
Latin American country may very well re-elect. One needs to live here to understand it.
And even then, it can stare you right in the face and you will miss it.

Friday, October 10, 2014

Hot and dry, 2nd round elections, and re-planting of soybeans on deck

What a week.

Brazil had its first round elections. The pro-business candidate Aecio Neves came from
a distant 3rd place to formidable 2nd place competitor.

It has the current power structure on high alert.

At this time, it is a 50/50 toss up who will win.
It reminds me of the George Bush II and Al Gore election.
A few votes will likely determine this one too.

The weather has gone bonkers here too. Normally the dry season
ends by now and we have daily rains.

It is normal for the Eastern states to remain dry a bit longer.
Planting soy in November as a single crop is the norm.

But Mato Grosso, what a shocker. Pop corn fart dry this week.
The forecast is for another 6 to 10 days dry then some rains.

Friends of mine have 3200 ha of soybeans planted of 14,000.
They have stopped planting waiting for more rains.

They are watching the development of recently planted soy.
They are worried that re-planting will be necessary.
Do it again !!!!!

Some say two more days dry, re-plant.

This is really screwing up the plans of producers that plan on
an early soy harvest in January and plant cotton and corn behind.

With the main soy areas being planted circa November in Mato Grosso,
it makes a 2nd crop almost impossible or at the very least very very high risk.

I have not seen this weather scenario manifest in the 13 years I have been
watching Mato Grosso.  This one is different. We have seen dry spells,
but nothing quite like this one.

We are off to an erratic start. Too wet down South. Wheat scab hurting the
crops in Parana and RGDS. Too dry in North and way too hot.
Up to 120 deg F at times.

I will monitor the situation.

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Saturday, October 4, 2014

Dollar, elections, weather

Sunday is the big day. Elections
The latest polls show President Dilma winning in a runoff on Oct 26th.

When I see the amount of contra Dilma propaganda on Facebook, on car bumper
stickers, and comments from friends, I wonder who is voting for her? No one
admits they will and yet she is the leader?

The lower classes and population centers must love her? Keep things the same.

It made me chuckle this week when she was asked about corruption again.
Her response, " I believe that there is corruption in all parts of the world".
I guess that makes it OK??? Normal operating procedure.

The dollar rallied to 2.52 Friday before selling off to 2.46 on the close.
The last three weeks a lot of volatility.

From my perspective 2.50:1 is about right. It is the max exchange rate
that investors and markets allow a country to have and yet remain viable.
We start talking 3:1, everyone knows you eat Bananas for breakfast.
Or at the very least, you are coo-coo for cocoa puffs.

Weather has been erratic. Heavy rains in Southern Brazil. Foz do Iguacu
is running at full force.

The Northeast is running behind. And the forecast that it is to remain below normal rainfall
for the next couple weeks. Coffee, Cane, and water reservoirs are of concern.

I will update clients Sunday night or Monday morning as per election results.

Conab will be out Thursday Oct 9th with their first 2015 crop size forecast.
I will send out special report.

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