Sunday, April 20, 2014

Looking ahead into May

Easter holiday April 18- April 21 here in Brazil.
Everyone is traveling it seems.

I will be going to Agrishow next week in Sao Paulo state.
It is South America´s largest ag show.
I will be talking to many equipment dealers and taking many photos.
I plan to send out a May special edition newsletter after I get back.

Subscriber link:

Rainfall has been beneficial lately for 2nd crop corn and sugarcane.
2nd crop corn that is planted on high clay content soils will likely make it.

We still need to watch early May rains. If rains shut off next week, as per normal,
30% of 2nd crop corn will be at risk. If the rains keep coming, they boys will get lucky
one more time.

As the saying goes for Northern Minnesota, late Easter = late planting.
As they say in Brazil, late Easter = late rains and slow start to dry season.
"Kinda interesting huh?"

Land market seems stable at moment. Sellers do not need to sell and buyers are
reluctant to chase land values. World Cup soccer starts in June. Combine this with
presidential election in October, many are taking a wait and see attitude.

Cattle prices have posted a record high in Mato Grosso last week. Maybe the cowboys
are winning vs the soybean farmers at the moment?

I really really hope central Mato Grosso can break ground on something in coming months.
Be it and a corn ethanol mill or the railroad. If we dilly dally one more dry season and maybe
change presidents in October, that means a cabinet change by January and maybe a review
of everything again. The clock ticks and ticks and ticks...........

Conab came out with a report saying that Brazil is 40 million tons short on crop storage
space. Mostly in southern Brazil and Northeast. Once upon a time the Coops told farmers
not to build grain bins, we will take care of you. Now the Mega Coops look like multi-nationals
and do not have the best interest of their patrons in mind. Everybody is steel bin crazy at the moment just like in USA with lack of rail cars. I have been through this before in the early 80´s when we built bins like wind breaks. We over did it. I expect the same will occur at some point again.

Inflation is running at 7% and for those investing in hard assets it makes one feel good.
For those trying to make a living, it is like cancer.

I think inflation is the best drug mankind has ever created. So many get caught up in the illusion.
In the end, inflation gets us all.