Saturday, November 22, 2014

Brazilian partners, English, Next generation, Investment ideas

Investment ideas 2.0

On my travels to Mato Grosso and throughout Brazil, I am always looking for who the new
leaders in Ag and Ag business will be.

I am speaking of the 2nd generation Mato Grosso pioneers that want to stay and follow
in their fathers footsteps. The age of these new pioneers are 18 to 30 years old.

There are a handful of brilliant, passionate, globally educated males and females
that are back running the family business and looking for a way to take their ideas
to the next level- to go international.

I have found a handful that speak perfect English, traveled the world, and are what
I call dynamic business-minded people ready to take their family business to next level.

People like this are literally 1 in a million. The thing many foreigners do not grasp is that
well to do families send their kids abroad to then come back home and help the family
business grow.These young people are not looking for a job per sey. They are looking for
opportunities to put their knowledge, know how, and who they know to work.

In USA, for example, a well to do family will send their son or daughter off to a well known
college and then encourage them join a company or start their own business before they are
incorporated in the family business. We in the USA tend to learn how to fail. Learn how a business
is run and work with people.

In Brazil, a wealthy family tends to look at getting a job either during or after college as
demeaning to the family image. The family business has more than enough to go around.
Thus, we see a different dynamic unfold.

I have been approached by young dynamic Brazilian male and females to form partnerships
with foreign investors. This is a broad range of interests.
These range from:

A Brazilian partner to help buy land
Non- GMO seed sales rice and soy
Cattle feedlots
ethanol mills/value added processing
Tourism locals hotels and R&R locals/ environmental tourism
Transport and  grain storage facilities and monitoring systems

There are many other possibilities ranging from restaurant chains, American
bar and grill themes, to sky diving in Brazil.

For those interested in thinking outside the box be it Brazilian or Gringo,
please drop me a note and we can chat about this and I can offer some
feedback as to what does and does not work in Brazil.

We are in a phase now where dollars are leaving Brazil and Brazil has a
scarlet letter on her flag at the moment. This will pass.
I think we are within a year of Brazil recovering and regaining some growth again.
The point is that one needs boots on the ground and due diligence needs to be
done prior to the next wave starting. One needs to be ready.

There are a handful of very dynamic "20 somethings" that are itching to do
what their fathers have done again. But this time it will be Ag 2.0 and 3.0
Internet, robots, drones,What´s App, processing, value added, etc that will turbo
charge the next decade. When I first came in 2001, one was lucky to have
a cell phone much less a signal !!!!

The next phase is not linear growth, it is exponential.


Wednesday, November 19, 2014

Brazil corn ethanol, soy germination, lower crop sizes

I am back at headquarters after a 10 day loop in Mato Grosso.

I have never seen such extremes in the soybean crop at this time of year.
One side of the road was just planted and the other side was 40 days old.

We will see average yields and also some great yields this season.
Two major concerns by producers this season. Below optimum germination and also
short soybeans. The bottom pods will likely be lying on the ground. It makes harvest difficult and
slow. With the 3-4 week delay in planting, many of the soybean totes were stored in sheds with
no ventilation. The temps inside these sheds rose to 120 deg F at times. Many producers blame
light stands on a drop in germination vigor because of this.

Abiove has lowered their crop size estimate for Brazil. I think IMEA will be next to drop
the size of the Mato Grosso crop. I think we are looking at a crop size the same as last year.

Talk of planting marginal land back in to pasture is picking up. Cattle are gold on 4 legs.
Soybeans are not gold at the moment. Back in the black yes, but not gold.

Above is a you tube video of the beginning phase of the Fiagril/USA joint venture
corn ethanol mill in Lucas do Rio Verde.

Clients and subscribers have been updated on almost a daily basis while I have been on
tour. Newsletters and VIP consult retainers are available on my site via Pay Pal or USA
bank wire upon request.

Retainers and subscriptions will go up in 2015. 7-10% to compensate for inflation.
For anyone interested, I will hold the 2014 price for you for a few more weeks.
New subscribers only

Many tours being planned for early 2015. Crop tours, Ag biz and 2nd crop
corn will be high on the interest list. Limited space available.

Drop me a note for more info.

Rains for the most part are normalizing. Next 5 days look wet.
However, the last 5 days in Goiania were supposed to be wet, and
we have not received a drop.



Wednesday, November 5, 2014

2015 crop tours

I am headed to Mato Grosso Friday for 9 days.

I will be doing my own crop tour and updating clients
in my November newsletter due out Nov 17th time frame.

For those of you that have contacted me regarding a 2015
soybean harvest and corn planting tour, time is of the essence.

Harvest will be a bit later than normal this year.
The full push harvest will not get going until the end of January.

February will be complete chaos. Rains, harvest, drying, planting,
and lack of storage. Truck lines as far as you can see.

Carnival is Feb 13-17th. Arriving during this time can be
time consuming and costly. It is best to arrive well before or
after Carnival.

Early and late February will be the optimal times to get a real time
grasp of yields and planting potentials for 2nd crop corn.

Late planted corn combined with no rain in April 2015 would mean
a wipe out for the 2nd crop. There is no more "cushion" left for this
years crop cycle. Things must unfold normally from here on out to maintain

What a difference a month makes. I told clients in September I would
remain conservative as to Brazil´s soybean crop potential. 93 million tons
has been my number.

Most everyone else was higher. Now with recent adjustments made by some,
I am now the optimistic one. For now I stand pat on my number until I see

With all the soybeans in the world, a 10 million ton drop does not really matter to
the markets. A 20 million ton drop would stop the decline and trade sideways
with an upward bias. It still would not be a bull market.

We are in a bear until events prove it otherwise.

Flash updates will be sent out to subscribers while I am on tour.

Drop me a note at for more info.


Saturday, November 1, 2014

Rain, bugs, rust, crop size

Nov 1

It is November and only 40% of the soybeans are planted in Mato Grosso vs
75% normally.

We have been getting some rains. But rains are light. In recent years, rains
tend to set in and last all day by this time of year. It is fine for now, but sure
is weird. If rains would be like this in early January when crop needs lots of
water per day, we have a problem.

Vegetative index year over year shows an expansion of the drought.

The soybean crop size of 95 to 98 mmt is now gone.
Those who forecast a mega crop will soon be dropping their numbers.

The range is now 89-94 mmt. I am in this camp.

The crop will be planted in the next two weeks.

Insects and caterpillars are already being sprayed for 20 days after

The key to the 2015 soybean and corn crops now hinge on the harvest
window from Feb 20th through March 15th. The weather at this time will
determine everything.

If a wet weather scenario would set in during February, very little 2nd crop
corn will be planted. If it is planted, it will be for cover crop purposes and
not for harvest.

Some have said a 40% drop in Mato Grosso 2nd crop corn is possible.
I am not there yet.

The likely scenario will be a 20% drop in planted area and if the rains
shut off in April, another 20% whack to the yield. It might feel like
a 40% drop in a perfect storm.

Asian rust is showing up on re-growth soybeans. This drives agronomists
batty to see this so early. We know we need to spray 3 times.
There will be pressure on these soybeans from a very early stage.
Keep in mind the longest day of the year is Dec. 21. That is only
50 days away. Soybean growers know what this can mean.

This is a whacky year. Some say the Amazon is malfunctioning??
Maybe needs a new pump?

The pioneers of Mato Grosso have not experienced this in their young
history of 20 to 30 years from Cerrado/Forest to farmland.

It would not surprise me if we are talking about flooding by February.
Roads and bridges washed out and moldy soybeans.

The rally in Chicago and the Dollar/Real have been a godsend for many.
1.25 CME + 1 dollar forex feels like US$ 2.25/bu rally in Oct for many.
This gets many guys back in the black if we can produce an average yield.

This also means more expensive fertilizer and chemicals for 2016.
It is a catch 22. What saves you in the short run castrates you in the
longer term.

Brazil raised her interest rates to 11.25% this week. Some say 12% is next.
Here is another paradox. Brazil needs to stimulate growth with budget
deficit spending and yet slam the brakes on inflation at the same time.

In 2009/2010 Brazil lucked out with the Ben Bernanke helicopter of dollars
looking for a home or aka  carry trade. Brazil had free money coming in.
No more free money. What will they do????

I will keep subscribers in the loop as I travel in Mato Grosso next week.