I am planning my own private crop tour of Mato Grosso starting January 20th.
I will be on the ground for the first of the soybean harvest and evaluate
the middle planted soy potential at that time.
I will start at Sinop and work my way back and forth 100-200 km deep
on each side of BR 163. I will do this all the way to Nova Mutum area.
This area would encompass circa 13 million tons of soy production potential.
We should be able to get a good grasp of crop size by then.
There is too much BS in the media these days. It is hard to know what
to believe.
I plan to send out at least 4 newsletters in January.
One a week on average.
I will send crop report updates direct to subscribers and my VIP
clients for their use.
The link for newsletter is:
http://www.brazilintl.com/newletter.html
The link to VIP consulting service is:
http://www.brazilintl.com/vip-pro.html
One can also access these links at the top of this blog page.
This includes follow up telephone and email reponses to querys.
If you have any questions or want to discuss options drop me an email
at agturbobrazil@yahoo.com
and we will set up a consult time to chat about options.
I am open to suggestions.
The newsletter price is firm for one year.
I would be open to a quarterly retainer at the VIP level for those
that want to monitor harvest conditions for the next 3 to 6 months and
not all year, for example. Renewal each quarter. For new clients only.
My telephone number is: 011-55-62-3286-1506
cell 011-55-62-9912-1085
WhatsAPP also
Happy Holidays
Kory
Wednesday, December 23, 2015
Friday, December 18, 2015
December 18 blog update
After posting recent dead soybean videos, there has been much demand for more comments.
I appreciate the interest, but I also need to balance what I post and what I send out to VIP clients
that are counting on an "edge" for their business.
Weather:
I am here in Goiania, Goias. This season we have had "3" decent rain events. They came as thunderstorms.
Everyday is a blue, sunny sky like we are in the middle of the dry season. For soybeans that have received some decent rains or have access to irrigation, this is paradise. Moisture in soil and sunny. Lots of energy, no disease, and deep roots. Each state in the Northern Arc has some spots like this.
Normally at this time of year, starting in early November, we tend have slow, sleepy, all day rains.
We do not have that anymore.
This bubble of HIGH pressure covers Mato Grosso, Goias, and MaPiToBa.
These regions encompass about 50% of Brazil´s soybean production.
We are now trying to figure out what loss factor to plug into this region.
5%,10%, 15% ???
On Monday, December 21, the first two soybean fields in Mato Grosso will be harvested.
Their yield will be 20-25 bu/ acre. 50% less than normal for super early soybeans.
The forecast this morning is for another 4 days of hot and dry before a chance of rain arrives
next week for the regions mentioned. Some forecasts call for 15 mm. Others are thinking 75 mm
for the coming week. Anyone who can get 75 mm next week will be very happy. Anyone who gets
15 mm or zero next week will need to clean out his pants.
In this upcoming period of late December and early January, we have " millions" of hectares of later
planted soybeans that will start grain fill. The rainfall in the coming days will be of epic importance.
I have heard reports of 65 bushel soy near Sinop that will now yield only 25-30/bu/acre because of recent dryness. What if this expands to the middle planted soy?
A friend of mine in Parana has applied fungicide three times to his soybeans. His soybeans are nice.
In the next two weeks, his soybeans will be in the bag so to speak. The lower leaves of his soybeans are covered in rust. He is worried about the later planted soy in his area. With the wet weather they have been having, there will be no way to stay ahead of the rust. Thus yield loss from normal is likely.
Yesterday on Ag TV Brazil, they interviewed a soybean analyst. He is thinking that by February we can see US$ 12.50 soybeans in Chicago. I started to cough and sputter. I am a mini bull at this point, but not that bullish.
This tells us the hype has started.
We have plenty of global supplies to chew through. We will not run out of soybeans. But the market has not factored in adequate weather premium into this Brazil crop.
We needed to get through the Argentine devaluation that was outlined in the Decmeber newsletter.
Thursday´s reversal now sets the stage for further gains in the near future.
9.00, 9.50? maybe 10 bucks yet? yes it is possible with a dry pattern continuing into January.
What to watch for:
There are forecasts for "three" (15 mm) events for Mato Grosso from Dec 21 until Dec 31.
If that is all that comes, katie bar the door.
If the core region can get 75 mm or about 3 inches in the near future, that will save some
potential. It will not reverse the damage to date, but it will buy some time for these guys.
15 mm or a 1/2 an inch will be nothing more than steam. It will help a soybean crop for a few
minutes, not days.
Merry Christmas to all
kory
I appreciate the interest, but I also need to balance what I post and what I send out to VIP clients
that are counting on an "edge" for their business.
Weather:
I am here in Goiania, Goias. This season we have had "3" decent rain events. They came as thunderstorms.
Everyday is a blue, sunny sky like we are in the middle of the dry season. For soybeans that have received some decent rains or have access to irrigation, this is paradise. Moisture in soil and sunny. Lots of energy, no disease, and deep roots. Each state in the Northern Arc has some spots like this.
Normally at this time of year, starting in early November, we tend have slow, sleepy, all day rains.
We do not have that anymore.
This bubble of HIGH pressure covers Mato Grosso, Goias, and MaPiToBa.
These regions encompass about 50% of Brazil´s soybean production.
We are now trying to figure out what loss factor to plug into this region.
5%,10%, 15% ???
On Monday, December 21, the first two soybean fields in Mato Grosso will be harvested.
Their yield will be 20-25 bu/ acre. 50% less than normal for super early soybeans.
The forecast this morning is for another 4 days of hot and dry before a chance of rain arrives
next week for the regions mentioned. Some forecasts call for 15 mm. Others are thinking 75 mm
for the coming week. Anyone who can get 75 mm next week will be very happy. Anyone who gets
15 mm or zero next week will need to clean out his pants.
In this upcoming period of late December and early January, we have " millions" of hectares of later
planted soybeans that will start grain fill. The rainfall in the coming days will be of epic importance.
I have heard reports of 65 bushel soy near Sinop that will now yield only 25-30/bu/acre because of recent dryness. What if this expands to the middle planted soy?
A friend of mine in Parana has applied fungicide three times to his soybeans. His soybeans are nice.
In the next two weeks, his soybeans will be in the bag so to speak. The lower leaves of his soybeans are covered in rust. He is worried about the later planted soy in his area. With the wet weather they have been having, there will be no way to stay ahead of the rust. Thus yield loss from normal is likely.
Yesterday on Ag TV Brazil, they interviewed a soybean analyst. He is thinking that by February we can see US$ 12.50 soybeans in Chicago. I started to cough and sputter. I am a mini bull at this point, but not that bullish.
This tells us the hype has started.
We have plenty of global supplies to chew through. We will not run out of soybeans. But the market has not factored in adequate weather premium into this Brazil crop.
We needed to get through the Argentine devaluation that was outlined in the Decmeber newsletter.
Thursday´s reversal now sets the stage for further gains in the near future.
9.00, 9.50? maybe 10 bucks yet? yes it is possible with a dry pattern continuing into January.
What to watch for:
There are forecasts for "three" (15 mm) events for Mato Grosso from Dec 21 until Dec 31.
If that is all that comes, katie bar the door.
If the core region can get 75 mm or about 3 inches in the near future, that will save some
potential. It will not reverse the damage to date, but it will buy some time for these guys.
15 mm or a 1/2 an inch will be nothing more than steam. It will help a soybean crop for a few
minutes, not days.
Merry Christmas to all
kory
Friday, December 11, 2015
Crop tours etc
A few curious types have emailed me about a crop tour
the end of January or early February.
I am happy to do so if there is interest.
It is hard to get professionals all on the same page
as per a tour.
If you think this is of interest, I will introduce
you to others that are thinking of coming.
You guys figure it out and I will do the rest
once dates are agreed to.
It will be a long drawn out harvest.
January 15th all the way to April 15th.
even in the prime areas.
The BR 163 ag show is the end of March and I will be
there. Hotel rooms are a problem.
the end of January or early February.
I am happy to do so if there is interest.
It is hard to get professionals all on the same page
as per a tour.
If you think this is of interest, I will introduce
you to others that are thinking of coming.
You guys figure it out and I will do the rest
once dates are agreed to.
It will be a long drawn out harvest.
January 15th all the way to April 15th.
even in the prime areas.
The BR 163 ag show is the end of March and I will be
there. Hotel rooms are a problem.
Dec 11 blog update Conab, weather, etc
I have sent out many updates this week to subscribers of stressed soybeans, farmer comments,
and some good fields too.
Conab starts the year out on an optimistic note.
One thing I do know, the soy crop will not be 102 mmt.
But even if we lose a few million tons here and there, the soy market
does not care this year.
I cannot help think but to myself if this were 2012-2013, when we had
super tight carryovers and the ships were waiting to load soybeans
in Paranagua in January.
What if we would have had a super El-nino then?
Soybeans would be moving 70 cents to a dollar per day
on the latest Brazilian weather forecast.
16 dollar soy? 20 dollar soy?
It makes me wonder.....
The past two weeks we get a 50 cent rally and give half of that back again.
No biggy
Southern Brazil is in great shape- probably too wet.
40% of the Brazil soy crop
The Northern 50% is under great stress.
Those beans filling pods now will not be much.
Those flowering this week and can get some rain in 10 days might
be fine yet.
Soybeans that have not seen rain in 40 days and are now crispy will
likley be abandoned and killed and then plant an early 2nd and only
crop of corn.
Those super young soybeans have some hope yet, but the Sun will work
against them later in the season. It is like planting soybeans the end of
June. What can we really expect out of those soybeans that will be harvested
in April?
The wild card will be the Dec 22nd rains that are in the forecast.
Those stressed soybeans that today are wilting and have a very deep root system.
Will they wake up, grow, flower, and set a bunch of pods in January?
We all know soybeans can fool us. If we look at vegetative index of Northern
Brazil, it looks like there will be a disaster....
The next 10 days of dry for those early planted soybeans are going to be tough.
50 bushel beans might turn into 30 yet.
Middle planted soy that looks like 30 bushel today might be 50 bushel yet in Janaury.
There are plenty of problem areas to keep an eye on the next 3 months.
But on the flip side, we have planted a record area of soybeans with
up to 60% of that area Intacta Pro soybeans which have a nice yield bump in them
if you give them a chance. i.e water !!!!!
This year will be one for the record books if Mato Grosso can pull off a decent
crop with 200 mm in Nov, 200 mm in Dec, and 200 mm in January.
600 mm during crop cycle when normally they would have received circa 1500 mm
during these three months.
Clay soils will be worth their weight in gold on years like this.
Sand will be very expensive ground this year.
When all this shakes out, I expect more and more land to be for sale
in the upcoming sales season.
The tide has gone out, let us see who was wearing a swim suit.
Happy Holidays
kory
and some good fields too.
Conab starts the year out on an optimistic note.
One thing I do know, the soy crop will not be 102 mmt.
But even if we lose a few million tons here and there, the soy market
does not care this year.
I cannot help think but to myself if this were 2012-2013, when we had
super tight carryovers and the ships were waiting to load soybeans
in Paranagua in January.
What if we would have had a super El-nino then?
Soybeans would be moving 70 cents to a dollar per day
on the latest Brazilian weather forecast.
16 dollar soy? 20 dollar soy?
It makes me wonder.....
The past two weeks we get a 50 cent rally and give half of that back again.
No biggy
Southern Brazil is in great shape- probably too wet.
40% of the Brazil soy crop
The Northern 50% is under great stress.
Those beans filling pods now will not be much.
Those flowering this week and can get some rain in 10 days might
be fine yet.
Soybeans that have not seen rain in 40 days and are now crispy will
likley be abandoned and killed and then plant an early 2nd and only
crop of corn.
Those super young soybeans have some hope yet, but the Sun will work
against them later in the season. It is like planting soybeans the end of
June. What can we really expect out of those soybeans that will be harvested
in April?
The wild card will be the Dec 22nd rains that are in the forecast.
Those stressed soybeans that today are wilting and have a very deep root system.
Will they wake up, grow, flower, and set a bunch of pods in January?
We all know soybeans can fool us. If we look at vegetative index of Northern
Brazil, it looks like there will be a disaster....
The next 10 days of dry for those early planted soybeans are going to be tough.
50 bushel beans might turn into 30 yet.
Middle planted soy that looks like 30 bushel today might be 50 bushel yet in Janaury.
There are plenty of problem areas to keep an eye on the next 3 months.
But on the flip side, we have planted a record area of soybeans with
up to 60% of that area Intacta Pro soybeans which have a nice yield bump in them
if you give them a chance. i.e water !!!!!
This year will be one for the record books if Mato Grosso can pull off a decent
crop with 200 mm in Nov, 200 mm in Dec, and 200 mm in January.
600 mm during crop cycle when normally they would have received circa 1500 mm
during these three months.
Clay soils will be worth their weight in gold on years like this.
Sand will be very expensive ground this year.
When all this shakes out, I expect more and more land to be for sale
in the upcoming sales season.
The tide has gone out, let us see who was wearing a swim suit.
Happy Holidays
kory
Thursday, December 3, 2015
December 3rd update
I will be back in office Sunday.
What I have noticed watching the satellite cloud loops is that
in the early evening there is a big poof in cloud development.
We see Red's in various spots in Brazil.
In Parana state this can mean 3-4 inches of rain.
The same Red in Goias and Mato Grosso means nothing.
We have thunder, some rumble, lightning, and maybe a few drops.
The GFS model is showing rain for Mato Grosso for mid- December.
Another forecast says no way- High and dry all the way into January.
Norwegian says UFFDA!!!!
Let us take this a day at at time.
Each day these soybeans need more and more water.
My soybean worry index is at "6".
By December 15th, it will likely be "7".
The vibe I get from producers is that:
It will rain, don't worry........
I ask myself what if it does not?
Parana and Mato Grosso do Sul are in great shape.
Some could say too wet.
Parana is on deck for 18 million tons of soy.
MGDS is on deck for 7 mmt.
(Almost in the bag)
Harvest in early January for them)
So 25 mmt of Brazil's 100 mmt are safe as per adequate moisture.
The other 70-75 mmt is still up for grabs and will be very late- historically speaking.
Mato Grosso was on deck to produce 29 mmt.
Not any more.
The problem is, as of today, we do not know what "Factor" to plug in for this
very historic weather event we are in. We simply do not have data to compare this too.
Western Cordoba in Argentina is floating in water.
Impeachment proceedings are starting in Brazil for her President.
Does this mean much in the near term?
nope
Depending on votes and timing of various holidays and assuming an impeachment
vote in the "House" in 2016 sometime, that means Dilma steps down for up to
180 days while Senate hashes things over.
I fear that 2016 could be another "Zombie year" Thriller 2.0
A country without direction and trying to run out the clock.
Frustrating
Kory
What I have noticed watching the satellite cloud loops is that
in the early evening there is a big poof in cloud development.
We see Red's in various spots in Brazil.
In Parana state this can mean 3-4 inches of rain.
The same Red in Goias and Mato Grosso means nothing.
We have thunder, some rumble, lightning, and maybe a few drops.
The GFS model is showing rain for Mato Grosso for mid- December.
Another forecast says no way- High and dry all the way into January.
Norwegian says UFFDA!!!!
Let us take this a day at at time.
Each day these soybeans need more and more water.
My soybean worry index is at "6".
By December 15th, it will likely be "7".
The vibe I get from producers is that:
It will rain, don't worry........
I ask myself what if it does not?
Parana and Mato Grosso do Sul are in great shape.
Some could say too wet.
Parana is on deck for 18 million tons of soy.
MGDS is on deck for 7 mmt.
(Almost in the bag)
Harvest in early January for them)
So 25 mmt of Brazil's 100 mmt are safe as per adequate moisture.
The other 70-75 mmt is still up for grabs and will be very late- historically speaking.
Mato Grosso was on deck to produce 29 mmt.
Not any more.
The problem is, as of today, we do not know what "Factor" to plug in for this
very historic weather event we are in. We simply do not have data to compare this too.
Western Cordoba in Argentina is floating in water.
Impeachment proceedings are starting in Brazil for her President.
Does this mean much in the near term?
nope
Depending on votes and timing of various holidays and assuming an impeachment
vote in the "House" in 2016 sometime, that means Dilma steps down for up to
180 days while Senate hashes things over.
I fear that 2016 could be another "Zombie year" Thriller 2.0
A country without direction and trying to run out the clock.
Frustrating
Kory
Saturday, November 21, 2015
Travels and thoughts Nov 21
Last week I was in Mato Grosso.
I am not impressed with soy crop.
I was to Brasilia this week. Many fields to be
planted yet in Goias.
Next week I will be in Southern Goias- stay tuned.
The soy crop is super late with below normal rains.
Parana and Mato Grosso do Sul are being hammered by rains.
Rain makes grain.
Will there be rust? Sure- there is always rust.
Spray fungicides and spray them again. Three applications are normal
these days.
We seem to get rain about once a week. Not everyday as per normal this
time of year.
In Mato Grosso, last week, good to excellent fields were from 10-15% of the
total area.
Reports out of Sorriso county last week of producers switching 1st crop
soy area to a 1st and only crop of corn.
This has never happened before.
We are dealing with a Mega El-Nino. It got stronger yet last week
from what I read.
The last big El-Nino was back in 1997.
Back in 1997 Mato Grosso planted 2 million hectares of soybeans with a yield
of 2.7 tons/ha. Today Mato Grosso plants 9 million ha with yields of 3.1 tons/ ha +.
Back in 1997 Goias produced 1 million ha of soybeans with yields of 2.5 tons.
Today Goias produces 3 million ha with yields of 3 tons/ha.
Tocantins back in 1997 produced Zero soybeans. Today the state plants 850,000 ha
and has yields of 3 tons/ha also.
If we go back to a previous El-Nino, we do not have any data to work with.
Bottom line to all of this. The crop is basically planted. The crop is young.
Harvest will be in March and April in many Cerrado states for 2016.
I have told clients that I do not think we have a 100 million ton crop on the way.
With Argentina ready to sell 10 million tons of soybeans, we are at a Mexican standoff
in the marketplace. Brazil is mildly bullish today. Argentina is mildly bearish today.
Does Brazil have the potential for a 10 million crop loss this season so far? No
Thus, until we have data supporting significant losses, we tread water it seems.
We need to burn up some carryover stock potentials in the coming months in order
to get optimistic again.
Dry January and a dry April/May 2016 would have the markets attention for both soy and corn.
I will be in Mato Grosso the end of March for the Show Safra 163 ag show.
This ag show is growing fast.
Kory
I am not impressed with soy crop.
I was to Brasilia this week. Many fields to be
planted yet in Goias.
Next week I will be in Southern Goias- stay tuned.
The soy crop is super late with below normal rains.
Parana and Mato Grosso do Sul are being hammered by rains.
Rain makes grain.
Will there be rust? Sure- there is always rust.
Spray fungicides and spray them again. Three applications are normal
these days.
We seem to get rain about once a week. Not everyday as per normal this
time of year.
In Mato Grosso, last week, good to excellent fields were from 10-15% of the
total area.
Reports out of Sorriso county last week of producers switching 1st crop
soy area to a 1st and only crop of corn.
This has never happened before.
We are dealing with a Mega El-Nino. It got stronger yet last week
from what I read.
The last big El-Nino was back in 1997.
Back in 1997 Mato Grosso planted 2 million hectares of soybeans with a yield
of 2.7 tons/ha. Today Mato Grosso plants 9 million ha with yields of 3.1 tons/ ha +.
Back in 1997 Goias produced 1 million ha of soybeans with yields of 2.5 tons.
Today Goias produces 3 million ha with yields of 3 tons/ha.
Tocantins back in 1997 produced Zero soybeans. Today the state plants 850,000 ha
and has yields of 3 tons/ha also.
If we go back to a previous El-Nino, we do not have any data to work with.
Bottom line to all of this. The crop is basically planted. The crop is young.
Harvest will be in March and April in many Cerrado states for 2016.
I have told clients that I do not think we have a 100 million ton crop on the way.
With Argentina ready to sell 10 million tons of soybeans, we are at a Mexican standoff
in the marketplace. Brazil is mildly bullish today. Argentina is mildly bearish today.
Does Brazil have the potential for a 10 million crop loss this season so far? No
Thus, until we have data supporting significant losses, we tread water it seems.
We need to burn up some carryover stock potentials in the coming months in order
to get optimistic again.
Dry January and a dry April/May 2016 would have the markets attention for both soy and corn.
I will be in Mato Grosso the end of March for the Show Safra 163 ag show.
This ag show is growing fast.
Kory
Saturday, November 7, 2015
Nov 7 blog Where is the rain?
It just can´t seem to rain like normal. We had some nice showers last weekend. Then it turned dry again.
I am headed to Mato Grosso this week. We have a tale of two worlds again. We talked about this last year but the rains started Oct 22 and continued normally. This year we have soybeans that are soon 45 days old and look good. We have soybeans that are 25 days old and need to replanted. We have vast areas not planted yet. Specifically Goias and the NE 1/4 of Brazil. Planting now will be considered late in these regions.
I am waiting for November 15th before I start to call this soy crop smaller than what is in the media today. There is still a chance things can correct and we have a late planted record soy crop and a very at risk 2nd crop corn. With Mato Grosso receiving above normal rainfall the past FIVE 2nd crop growing seasons, our memories tend to get short sided and we forget what "Can happen".
Brazil is pumping out all this extra corn at a record pace. 28.8 million tons for Nov 1, 2014- Oct 31 2015. Some say that for calender 2015, Brazil corn exports will be above 30 mmt.
Petrobras workers have been on stike this past week. Interupted total oil production for the week is about 800,000 barrels. Not a big deal on the global oil market, but needs to be watched if this continues a week or two- moreso for Brasil domestic energy markets.
Truckers plan to strike again on Monday. Let us see if they can make something stick this time.
It seems to take about 2 weeks for shortages to start showing up in the supply chain of various products.
With enough of these disruptions, this will eventually bring government to thier knees. There will not be enough fire trucks to keep all the fires out.
Currency market has been controlled again in recent weeks. Central bank is crapping in their pants that USA raises interest rates in December. It puts the Brazilian Real in a no win scenario. They cant keep ahead of inflation and budget concerns.
More movement this past week on the proposed rail project for Northern Mato Grosso up to the Amazon river system and then barge soy, corn, and meal further up the Amazon for loading of Panamax ships.
This would be a boon for the region. I still have my doubts as per the short term practicality of such projects given that government can´t even pay contractors for work that has been done on other roads and rail roads this year. If the multi-national grain companies and China could get together and float this project without Brazilian government intervention, this thing could have legs in the next year or two.
But as we have seen, when has Brazilian government ever not obstructed progress? They don´t even have the statesmanship to resign when clearly they are not working in the publics best interest.
Bottom line to all of this:
I am not sounding the alarm bells quite yet. With current weather patterns, I will sound the yellow alert after Nov 15th. Soy production will be at risk and 2nd crop corn at great risk. At the moment Parana is the "Garden of Eden" and well on the way of producing 18 mmt alone. Will Mato Grosso come in at 29 mmt as per expectations? and 20 mmt of 2nd crop corn? With this pattern we have today- no way-
If it rains cats and dogs Nov 15th- Jan 15th, we still have a chance on seeing Mato Grosso blow us away with yet another record, but my antennae is up!!!!
I am headed to Mato Grosso this week. We have a tale of two worlds again. We talked about this last year but the rains started Oct 22 and continued normally. This year we have soybeans that are soon 45 days old and look good. We have soybeans that are 25 days old and need to replanted. We have vast areas not planted yet. Specifically Goias and the NE 1/4 of Brazil. Planting now will be considered late in these regions.
I am waiting for November 15th before I start to call this soy crop smaller than what is in the media today. There is still a chance things can correct and we have a late planted record soy crop and a very at risk 2nd crop corn. With Mato Grosso receiving above normal rainfall the past FIVE 2nd crop growing seasons, our memories tend to get short sided and we forget what "Can happen".
Brazil is pumping out all this extra corn at a record pace. 28.8 million tons for Nov 1, 2014- Oct 31 2015. Some say that for calender 2015, Brazil corn exports will be above 30 mmt.
Petrobras workers have been on stike this past week. Interupted total oil production for the week is about 800,000 barrels. Not a big deal on the global oil market, but needs to be watched if this continues a week or two- moreso for Brasil domestic energy markets.
Truckers plan to strike again on Monday. Let us see if they can make something stick this time.
It seems to take about 2 weeks for shortages to start showing up in the supply chain of various products.
With enough of these disruptions, this will eventually bring government to thier knees. There will not be enough fire trucks to keep all the fires out.
Currency market has been controlled again in recent weeks. Central bank is crapping in their pants that USA raises interest rates in December. It puts the Brazilian Real in a no win scenario. They cant keep ahead of inflation and budget concerns.
More movement this past week on the proposed rail project for Northern Mato Grosso up to the Amazon river system and then barge soy, corn, and meal further up the Amazon for loading of Panamax ships.
This would be a boon for the region. I still have my doubts as per the short term practicality of such projects given that government can´t even pay contractors for work that has been done on other roads and rail roads this year. If the multi-national grain companies and China could get together and float this project without Brazilian government intervention, this thing could have legs in the next year or two.
But as we have seen, when has Brazilian government ever not obstructed progress? They don´t even have the statesmanship to resign when clearly they are not working in the publics best interest.
Bottom line to all of this:
I am not sounding the alarm bells quite yet. With current weather patterns, I will sound the yellow alert after Nov 15th. Soy production will be at risk and 2nd crop corn at great risk. At the moment Parana is the "Garden of Eden" and well on the way of producing 18 mmt alone. Will Mato Grosso come in at 29 mmt as per expectations? and 20 mmt of 2nd crop corn? With this pattern we have today- no way-
If it rains cats and dogs Nov 15th- Jan 15th, we still have a chance on seeing Mato Grosso blow us away with yet another record, but my antennae is up!!!!
Thursday, October 22, 2015
Oct 22 update The heat is on
I now know what it feels like to live in Baghdad. It seems like from time to time we see remote areas of the planet with heat readings of 150 degrees F. That has been the heat index in the sun for many spots in the Brazilian Cerrado this past week. Sun, no clouds, no wind- pure heat!!!! Last year at this time we were having much the same weather. Rains started about Oct 20th and saved the day. Last year the loss potential from dry weather was about a million tons. Western Mato Grosso and SW Goias were hardest hit with early planted soybeans. This year we are off to a slow start in Mato Grosso with replanting very likely in some locations. The risk of soybean seed burnout is very high. Goias has not planted anything yet. A few fields might be planted, but they are under pivots. At this time it is futile to forecast Brazil soy crop potential. At this time, a 100 million ton crop is likely. But if we are still dealing with erratic weather on November 15th, we can start subtracting from that number. Last year the rains came in the nick of time to save soybean potential in the Bahia and Minas Gerais region. Tocantins, a frontier state, had record soybean yields. They were the "Garden of Eden" last year. This year feels different to me. The past two weeks records have been broken going back 75 years in some locals. Mato Grosso has had soybeans now for about 30 years. In the heart of Mato Grosso, soybeans are 20 years old. How do we deal with 75 year old records when the crop we are trying to forecast has a 20 year history? We all know we don´t kill soybeans in June in USA.
We kill them in August. This year was a perfect example. From June 15th to July 15th, we were killing the USA crop. In the end, damn nice crop. It is much the same here, we will kill the Brazil crop in January- if it is going to happen. We are pushing the bulk of the harvest into February now. February better be nice, or we will have a real mess. It better not rain for two weeks straight in February, or everyone will lose their minds. I read today that some are expecting a 13% increase in 2nd crop corn area. I don´t see it. They will be damn lucky to maintain last year´s area. I will know more in November after my Mato Grosso trip. I cannot help but think to myself- what if this year is 180 degrees different than last season? We could knock 10 million ton off the soybean crop and the 2nd crop corn could be a disaster....... Am I forecasting this today? NO..... But, there are things in play today that are out of everyone´s control and the calender will dictate what can and can´t be done by March 5th. I expect 1 million ha of 2nd crop soybeans up from last season´s 680,000 ha. If 1st crop soy is nipped by drought, my guess is that many will plant soy again and skip 2nd corn. This is the last year for them to do a soy/soy, it just might happen, especially with FX in their favor. Lots of variables as of today. I can build a soy story ranging from 90 mmt to 102 mmt tons, depending on the soybean gods. Six percent decrease in fertilizer sales, expected area to increase by 3%, late planting, insects, poor germination, strong FX, and murphy´s law all come into play for the next 90 days. Let us see if Monsanto can collect royalties on saved seed in February?
What was looking like a boring season back in June is rapidily becoming "Thriller 2.0". Subscribers will be the first to know. Thank you all, Kory
Friday, October 9, 2015
Oct 10 update
The start of soybean planting is off to a slow start. The center-west region of Brazil remains hot and dry.
It looks like a repeat of last year. Late planting concerns will be the hot topic the next couple weeks. Conab report came out with a 100-102 million metric ton soybean crop for 2016. With 2016 the last year farmers can legally plant soy/soy, they are probably correct with their estimate. 2017 will start the no planting of a 2nd crop of soybeans from January through September each year. The dollar has traded 4.25:1 two weeks ago and as I type this the dollar is 3.75:1. If we drop back to 3.50:1, farmers will start to complain they will lose money in 2016. For those of you that have come down on a tour in recent years, you know how much things cost when the dollar was below 2:1. If anyone is interested in a winter tour this season, we could probably add in a couple nights in Rio for the same prices as three years ago. It depends on the group size obviously. The bottom line is that US$ 5000 will get a you a little more bang for your buck than three years ago. A few days in Mato Grosso with either a Foz do Iguacu or Rio add on to your tour. We are likely in a 3.80-4.20:1 trading range with the Dollar/Real in the coming months.
Tuesday, September 22, 2015
Sept 23 blog update
Wow Dollar is 4:1 + now. Soybeans are R$ 85/sac at port and R$ 65/sac in Sorriso, MT.
Soybeans are going in the ground in Parana state. Mato Grosso and the Cerrado are literally
baking to death. It feels like a nuclear reactor is leaking !!!!!!!! The forecast is for dryness to continue until early October. We now have a late planting issue again. Last year was late and it really did not make much difference in final yields. We maybe lost 1-2% on a national basis. Will this year be different? We have two scenarios unfolding in Brazil politics today. There are those that believe that President Dilma will be gone by Christmas and stability will return to Brazil FX. The other is that this soap opera has just begun and we will see Dollar:Real 5:1 in 2016. At Dollar 5:1, it is hard to wrap one´s mind around what the effect of the "Law of unintended consequences" will be? It seems like it will be a boon for soybean farmers. For some it will be. Then again, they could start to treat soybeans like a currency hedge and refuse to sell them at any price - just like Argentina. There are rumblings that the government wants to tax soybean exports like Argentina. This is insane since Brazil is taxed so many times already with Brazil costs of transport, logistics, and cost of production. But with Dollar 5:1, and a desperate government looking to shake the money tree, we can´t rule anything out. For now it is just smoke.
I visited a fertilizer dealer this week. The spreadsheet he gets each day is stable in dollars per ton price quotes. When a client calls, he enters in the spot FX and the fertilizer prices convert to Reals. If you step out to cut your hair and think about the quote, the price is no longer valid when you call back.
If the FX moves more than 3% per day, the whole system shuts down and will not accept new fertilizer orders until the FX closes and updates for the following day. These are volatile times in Brazil. One day you can look like a hero and the next you can have your testicles served to you on a silver platter. These feast and famine stories will be common the next 90-120 days- maybe longer. I get the feeling this is just the beginning. Drop me a note if you want to be put on a distribution list. Newsletter is one option. VIP flash updates are another. I was thinking a few months ago, this was going to boring this crop cycle. Nope, Thriller 2.0 is being cast now.
Sunday, September 13, 2015
Sept 14 blog update
Soybeans are being planted in Parana state. Mato Grosso remains dry but soybeans are being planted under pivots. Conab will come out with initial crop size forecasts for 2016 Oct 9th. The Dollar is now 3.88:1. 4:1 seems to be around the corner. Last week I sent out a forecast to subscribers that a Dollar/Real FX of 5.80:1 in the next 18 months is possible. I was in shock reading the predictions. It seems other worldly. The FX at 1.60:1 twice, back in 2008 and 2012, seems so rediculous in hindsight. The Brazilian farmer has already sold a good portion of the 2016 crop. 30-40% is common. The rest he will likely use as a currency hedge. It is better to have soybeans or dollars than Reais in a bank. This is the mantra. People with money have taken their money out of the banks and bought livestock, land or apartments as a way to preserve wealth. This makes it harder for banks to make new loans. Fertilizer deliveries are running way behind schedule. Some fertilizer dealers are not giving quotes. They want the farmers to beg. The farmer will pay anything for fertilizer at the last minute in October or November. We know there will be expanded area of soy. We still do not know if a 2nd crop of soybeans will be allowed in some states. We know crop inputs will decrease this year. Could this affect final productivity? When one reverse calculates current soybean prices back to dollar 2.50:1, today soybean prices in Brazil feel like US$ 13.00/bushel in Chicago.
Soybeans look better than corn, edible beans, cotton, rice and sugarcane at the moment. Soybeans are equal to 100 dollar bills anytime. All the other commodities require a waiting period to get paid. What do you expect a Brazilian farmer to do? Soybean producers in USA and Argentina need to be alert for a Dollar/Real greater than 4:1. Above 4:1, no one can compete with Brazilian farmer with regards to exports at port.
At 5:1, things get even more interesting. One could assume Brazil could compete all the way down to US$ 6 dollars per bushel in Chicago. The caveat will be the imported products such as fertilizer, chemicals and Ag machinery pieces. Key items I will be watching in the next 90 days are saved seed royalties and how they plan to collect them, 2nd crop soy area- if any, soy no-plant dates for 2016, and delayed fertilizer delivers and thier impact on final yields. Thank you all for your interest in the newsletter of late and the phone call consults. I appreciate your confidence. Abracos Kory
Sunday, August 30, 2015
Sept 1 blog update
In a few more days producers will start planting soy in western Parana.
A few days after that, circa Sept 10th, producers will start to plant soy in
Mato Grosso.
We have had a few sprinkles in Goiania. This is a bit early but a nice break
from the heat.
Dollar is trading 3.58:1.
I think circa 30% of the 2016 Mato Grosso soybean crop has been priced
at higher levels.
The strong Dollar/Real realtionship protects Brasilian farmers from
lower prices in Chicago. FX trumps CME at the moment.
We need to watch legislation to see if 2nd crop planting of soy behind soy will be allowed in
Parana and Mato Grosso. They want the no-plant window widened. If they can plant in early September,
there will be time to harvest and still plant a 2nd crop soy and harvest it by the no-plant dates.
If planting gets delayed, many producers will likely run out of time and plant 2nd crop corn.
Last year 700,000 ha were planted to a 2nd crop soybeans which bumped the national production
upwards. These will be the swing hectares that will determine if Brasil produces 96/97 mmt in 2016 or
the national total rubs up against 100 mmt.
El Nino will likely keep us on the edge of our seat during Christmas in one local or another.
It will likely be too dry in one region and too wet in another. This may affect 1 or 2 million
tons of potential again.
Fertilizer sales are said to be 3-4% lower than last year. This is odd since area is said to
increase by 3%+ this year again. Could this affect productivity at the end of the day?
Intacta II soybean area will likely be 35-40% of the total area in Brasil.
These varieties have been yielding very well the previous two seasons.
This technology is increasing the trend line yields in Parana and Mato Grosso.
Instead of 52 sacs per ha, the average is now closer to 55 sacs per ha.
Newsletter subscribers and VIP clients will be the first to know as current events
unfold this crop year.
Drop me a note if you have any questions.
Kory
Wednesday, August 19, 2015
Dollar 3.45, 25 days until planting, saved seed and planting soy on the moon
Greetings from warm and sunny Brasil.......
We are about 25 days from the start of the 2016 planting season.
Some corn is being planted in Parana as we speak.
The Dollar:Real is trading in the 3.45 area.
It seems surreal even for me for type the number.
When the dollar was 1.55:1 back in 2012, I told myself that if the dollar
gets back to 3:1, I will ____________ fill in the blank.
Well here we are. The Brasil gov't wasted so much time and money trying to
control the currency back in 2013 and 2014. The illusion of 2:1 and trying
to keep inflation under control was 100% political.
What will happen to President Dilma Rousseff? I do not know.
If I were Brasilian, I would burn Brasilia to the ground and start over.
This sounds like terrorist activity. I am not. This leaves us with the more
rational option of hoping aliens attack Brasilia first and take the PT party
back with them from where ever they came from. They surely are not from Earth.
The one thing I do know is that, in the short term, the more chaos there is
economically and politically, the better it is for the Brasilian soybean producer.
Today the dollar is trading at levels seen back in 2003. But that is only half the
story. If one factors in the inflation of the dollar over 12 years, the Real should be
trading 4.88:1.
I will make one prediction. If the dollar trades 4.88:1 in 2016, we will see Brazilians
co-venture with Elon Musk and Space X and the first soybean seeds will be transported to
the moon for planting. The question will then be: Does Monsanto have royalty rights on the moon?
What if it was saved seed? Does the lunar market prefer Non-GMO or GMO soy?
So many new questions arise when the dollar hits 4.88:1 !!!!!!!!!!
The 6-10 day forecast shows rains starting to form in western Mato Grosso.
This bodes wells for early planting.
The big issue to be watching in coming months is how Monsanto and farmers
deal with the potential for 7.5% discount at point of sale for saved
seed royalties. I will take calls privately by appointment only in the
coming months. It is a sensitive subject and will have a political solution
in the end.
I am working on September newsletter and I will feature stats from the amount
of soybeans moving north through the Arco-Norte region of ports.
There will be wall to wall soybeans in 2016 in Brasil.
We need to keep an eye out for a droughty pattern but as per last year's
results, as long as it rains by the end of January, in most cases the crop
can be saved.
Fertilizer sales remain slow and late to be delivered.
Drop me a note it any questions.
Kory
agturbobrazil@yahoo.com
Sunday, July 26, 2015
Dollar 3.30, El nino, and more soy
Dollar is at best levels since 2003.
3.30:1 is a gift from Heaven for Brasilian farmers.
Cost of production will be at a record high for soybean growers this
next season. They will need every "Real" they can get, but 3.30 makes
this a whole lot easier than 45 days ago.
Reports are for up to a 4% increase in soybean area on the 1st main crop.
This just might happen.
Fertilizer sales are running 10% behind last year´s pace.
This needs to be watched as we go into planting.
El nino? What does that mean for Brazil?
I do not know.
Does this automatically mean a 96 mmt soybean crop without
any effort?
Or does it mean there could be a 10 million ton hiccup along the way
and we keep this interesting?
Last year Brazil planted 700,000 ha of double crop soybeans.
(soy behind soy)
This gave us 2 million bonus tons late in the season.
Talk is for widening the no-plant window for 2nd crop soy
in 2016. If this happens, there will be less 2nd crop soy.
Corn crop is fantastic. Prices are about R$1.80/bushel in Mato Grosso.
They will make a little money on the corn given the above average yields.
President Dilma Rousseff´s approval rating has dropped to 7.7% positive.
More and more demands for her resignation or impeachment.
High level corporate execs are being arrested and thrown in jail for
corruption through the years.
The PT party has a nasty odor in Brasil at the moment.
Every week we get closer to the top of the corruption pyramid.
The cost of food, electricity, services, "shaving cream", and a host of
other products are getting out of control. Inflation is moving into
3rd gear now. When will the turbo kick in?
The poor are getting worried. Lack of jobs with unemployment up 2%
this past year. I feel that it is actually more than that.
More and more "contacts" of mine are asking for a little help.
Kory, could you loan me a little money. I am short this month.
I am happy to buy some bread or a pack of cigarettes for someone.
But now a couple of friends want me to deposit money in their account.
I have not experienced this for a long time in Brazil.
I know things are getting tight.
For the near term, I am watching the potential for cool air to descend into
the American Midwest in late August.
This could provide fuel for the markets later this fall.
If so, the South American producers will be grateful.
Friday, July 17, 2015
Pantanal Adventure
I have been in Pantanal the past 10 days.
Lots of wildlife and fishing.
Here are a few photos.
You tube video here:
https://www.youtube.com/watch?v=gkiT4V7KXSw&feature=youtu.be
Friday, June 26, 2015
Solving the soybean ghost acre puzzle
Did Brazil really expand 1.7 million hectares last year?
This question has been bugging me for two months.
We knew about 400,000 hectares were switched from 1st crop
corn last season. That still left us with 1.3 million new hectares.
Given the dollar exchange rate last year at this time and the tight
cashflows, it made no sense for Brazil to keep the pedal to the metal.
I think about 300,000 hectares that Conab found in remote areas of
Para and Rondonia were actually "catch up" hectares. These were areas
being prepped back in 2013 for 2014. They may or maynot have been
planted. Maybe the 1st crop out of pasture was so-so at best. But those
hectares came on line with robusta in 2014/15.
This leaves us with about 1 million new hectares on a year over year basis.
This is slower than the previous 2.5 million hectare increase year over year,
but still respectable none the less.
An article was published June 25th at the 7th Congress of Brazilian soy.
Here they were discussing the continuing agronomic problem of planting
soybeans on soybeans in Brazil. In Mato Grosso they have extended the
no plant window. Yet, many producers squeezed in a 2nd crop and planted
their own seed again.
In Parana state, the increase of soybeans on soybeans was up 21% year over year.
Crop scientists are concerned about the ineffectiveness of fungicides in the future
if we continue to push the limits on soybean rust resistance. In a few years, we might
not have the tools to control rust effectively and within a reasonable cost parameters.
The datapoint that stood out for me was that 680,000 hectares were planted to
a 2nd crop soybean this past year. With a yeild of ~2.8 tons/ha, this is about
2 million tons of bonus soybeans this past crop cycle.
With the June Conab report showing production of 96 million tons of
soybeans this past season, we can now see that the 1st crop or main crop
was circa 94 million tons. This makes sense now.
I wish Conab would give a 2nd crop soybean designation so we could all get
a better grasp as to what hectares are coming from crop switching, pasture conversion,
and double crop of soy.
There is talk of widening the no plant window even further for 2016.
If so, we may have see the peak of soy/soy area.
But with cheap corn prices, the ability to replant your own seed, and the
profitability of soy/soy, one cannot blame the farmer for trying.
The increase in Brazil soy area basis is first crop was more like 3% YoY
and not 5% as previously thought.
The pace of expansion is slowing.
With the recent rally in soybeans, this puts many areas back in the black for
2016 in the interior of Brazil.
80 cents X 2.2 X 3.10 = R$ 5.50/sac of soybeans X 50 sacs = R$ 275 direct
to the bottom line. This has happened in two weeks.
This helps firm up the 2016 planting intentions for Brazil.
Will we expand again? stay tuned- monitoring
This question has been bugging me for two months.
We knew about 400,000 hectares were switched from 1st crop
corn last season. That still left us with 1.3 million new hectares.
Given the dollar exchange rate last year at this time and the tight
cashflows, it made no sense for Brazil to keep the pedal to the metal.
I think about 300,000 hectares that Conab found in remote areas of
Para and Rondonia were actually "catch up" hectares. These were areas
being prepped back in 2013 for 2014. They may or maynot have been
planted. Maybe the 1st crop out of pasture was so-so at best. But those
hectares came on line with robusta in 2014/15.
This leaves us with about 1 million new hectares on a year over year basis.
This is slower than the previous 2.5 million hectare increase year over year,
but still respectable none the less.
An article was published June 25th at the 7th Congress of Brazilian soy.
Here they were discussing the continuing agronomic problem of planting
soybeans on soybeans in Brazil. In Mato Grosso they have extended the
no plant window. Yet, many producers squeezed in a 2nd crop and planted
their own seed again.
In Parana state, the increase of soybeans on soybeans was up 21% year over year.
Crop scientists are concerned about the ineffectiveness of fungicides in the future
if we continue to push the limits on soybean rust resistance. In a few years, we might
not have the tools to control rust effectively and within a reasonable cost parameters.
The datapoint that stood out for me was that 680,000 hectares were planted to
a 2nd crop soybean this past year. With a yeild of ~2.8 tons/ha, this is about
2 million tons of bonus soybeans this past crop cycle.
With the June Conab report showing production of 96 million tons of
soybeans this past season, we can now see that the 1st crop or main crop
was circa 94 million tons. This makes sense now.
I wish Conab would give a 2nd crop soybean designation so we could all get
a better grasp as to what hectares are coming from crop switching, pasture conversion,
and double crop of soy.
There is talk of widening the no plant window even further for 2016.
If so, we may have see the peak of soy/soy area.
But with cheap corn prices, the ability to replant your own seed, and the
profitability of soy/soy, one cannot blame the farmer for trying.
The increase in Brazil soy area basis is first crop was more like 3% YoY
and not 5% as previously thought.
The pace of expansion is slowing.
With the recent rally in soybeans, this puts many areas back in the black for
2016 in the interior of Brazil.
80 cents X 2.2 X 3.10 = R$ 5.50/sac of soybeans X 50 sacs = R$ 275 direct
to the bottom line. This has happened in two weeks.
This helps firm up the 2016 planting intentions for Brazil.
Will we expand again? stay tuned- monitoring
Tuesday, June 16, 2015
2016 Brazil soy crop size - tide is turning
The paradox continues:
I must say the past month has been confusing.
Conab increased the size of the 2015 soybean crop yet again.
About 300,000 ghost hectares were found in remote areas of
Brazil.
I ask myself: did Brazil really expand by 1.7 million hectares last year?
Could this number actually be a catch up number for two years?
Maybe the 2014 crop was a bit larger than we thought after mini-drought?
I do not have an answer. I am trying to square the circle and look forward.
In the past week, I have read two Brazilian consultants forecast small
increases for the 2016 crop.
I scratch my head. Really? Are we so sure?
Credit is more expensive and the funds will be going out late.
In some locals, fertilizer and chemical sales are said to be delayed by 60-80%
compared to last year.
Fertilizer sales are lagging 2014 volumes. Brazil fertilizer stats delivered
to consumer are down 12% compared to 2014. Historically, this has
been a leading indicator to soybean expansion by this time of year.
(Special update sent out to subscribers)
The exchange rate is the incentivizer for 2016 soybeans. More so in the
Southern states where soybeans are still profitable. For the interior of Brazil
and Mato Grosso, it is all a crap shoot as per profitability for 2016.
Today I read that Agro-consult is forecasting a small drop in planted area.
I shouted "Alleluia" when I read the article.
Someone is actually thinking. I have been the conservative voice with these numbers
in recent months, and I have been proven wrong time and time again by one
agency or another.
I have been saying for 12 months that the numbers i.e. cashflows do not
justify accelerated expansion in many regions. It is time for Brazil to take
a break- tap the brakes and make sure China needs all these damn beans.
The fertilizer sales needs to be watched in the next 60 days.
We could be on the cusp of a big surprise come October.
Monitoring
Kory
Saturday, June 6, 2015
Where are the Maserati´s?
Seems like yesterday when soybeans made their 1st run to US$ 16.50/bu in 2008.
Jim Rogers was everywhere talking about farmers driving Maserati´s and New York
investment bankers will be driving taxi´s?
I wanted to believe this as much as anyone.
We had a 2nd run in 2012 and soybeans touched US$ 18.00/bu. I told myself at the
time that if 18 bucks does not get Iowa farmers into Maserati´s- nothing will......
I know a few guys that drive around in Porche´s, but I do not know of one American
farmer that drives a Maserati yet???
Farmers are farmers, they buy new US$ 60,000 diesel crew cabs in multiples.
I look at cash corn price´s for NW MN and NE ND and I see LDP type prices
going forward. I do not think a Maserati dealership in Iowa or North Dakota will
be successful in the near future.
I see more Chevrolet Camero´s imported in Brazil these days. I even see them in
farm country. But no one drives a Maserati.
I did see one Maserti while I dropping my son off at school recently. I thought maybe he
bought it, but a few days later he was back in his SUV. Must have been just a
loner car. * 6/8 update: The Maserati was at school again today. It is his.
Batman of Goiania is on Patrol this morning.
When I saw it, it jarred my memory- where are the Maserti´s I asked myself??
Just to be clear, the guy driving it was not a farmer.......
Jim Rogers was everywhere talking about farmers driving Maserati´s and New York
investment bankers will be driving taxi´s?
I wanted to believe this as much as anyone.
We had a 2nd run in 2012 and soybeans touched US$ 18.00/bu. I told myself at the
time that if 18 bucks does not get Iowa farmers into Maserati´s- nothing will......
I know a few guys that drive around in Porche´s, but I do not know of one American
farmer that drives a Maserati yet???
Farmers are farmers, they buy new US$ 60,000 diesel crew cabs in multiples.
I look at cash corn price´s for NW MN and NE ND and I see LDP type prices
going forward. I do not think a Maserati dealership in Iowa or North Dakota will
be successful in the near future.
I see more Chevrolet Camero´s imported in Brazil these days. I even see them in
farm country. But no one drives a Maserati.
I did see one Maserti while I dropping my son off at school recently. I thought maybe he
bought it, but a few days later he was back in his SUV. Must have been just a
loner car. * 6/8 update: The Maserati was at school again today. It is his.
Batman of Goiania is on Patrol this morning.
When I saw it, it jarred my memory- where are the Maserti´s I asked myself??
Just to be clear, the guy driving it was not a farmer.......
Sunday, May 24, 2015
What have we learned from 2015 crop year?
As I think back to last October and the hot dry conditions,
we read countless emails and articles about how this will
affect the soybean crop and eventually the 2nd crop corn.
I was in the heat of it with my opinions about crop size and
potential losses.
I remember watching the canal rual ag show in mid-November
interview a farmer from western Mato Grosso. He was adamant
that soy losses in western Mato Grosso would be 30%. I calculated
this and told clients that Mato Grosso has likely lost 1 million tons
of potential already.
At the end of the day, Mato Grosso had a bumper crop and record
production. The average yield for the state did drop about 1/2 bushel
per acre from 2014. This is an indicator that the drought and late planting
did have an affect, but with the increase in planted area of 5%, the overall
production was still an increase year over year.
January was record hot and dry for Goias state and areas to the Northeast.
It was easy to see that Goias would lose 1 million tons of potential. The question
would be if the state would lose 2 million tons???
Bahia, Piaui, and Maranhao states did remarkably well considering the conditions.
They increased area and productivity came in higher than 2014. I was not expecting
this to happen.
The two states that stand out this year were Tocantins and Para state. Tocantins had
Garden of Eden conditions. Tocantins increased area by 10% and production by 15%.
Para expanded area and production by 27%. We need to keep in mind that these
increases come from relatively small base lines. But the expansion in these areas cannot
be ignored. Two crop years go by and all of a sudden there is another million tons
of production that very few on the planet are aware of.
In summary, Brazil lost about 1 million tons of soybean potential this past season.
This occurred mainly in Goias state. The most recent Conab report stated that Brazil
produced 95 million tons of soybeans for 2015. Early on I was thinking more like
93 million tons should cap this crop.
Therefore, Brazil´s 2015 potential was 96 mmt. Period..........
Brazil expanded 1.4 million hectares this past season. I was not expecting that.
What can we divine from this for 2016?
I said last year that the more Brazil expands, the more she will contract later.
The dollar was 2.40:1 at the time - tight cashflows....
The FX currency exchange is the saving grace for the Brazil farmer for 2016.
The dollar at 3:1 keeps them in the game. Every hectare is a "blackjack".
Costs are going up. Fertilizer, chemicals and seed are higher in local currency
after they are imported. Some farmers are saving their own seed. Some are
cutting back on volumes of fertilizer. Will this affect productivity in 2016?
We do not know.....
A few that still had expansion plans are scrapping these projects. Conserve
working capital is the mantra at the moment. Banks are cutting back credit
lines and interest rates are on the rise.
At this time, I am not seeing Brazil expand for 2016. But at the same time,
she does not need to contract quite yet.
It is a "Check Mate" at the moment with Chicago. Who will flinch? Chicago,
Brazil soybean expansion, China, or will Argentina scare the daylights out
of everyone later in the year and bury the soybean market but good........
As long as dollar trades 3:1 to 3.30:1 between now and next February,
I think the Brazil farmer can tolerate these prices. If the dollar would drop to
2.50:1, the tears from all the farmers would flood the Amazon.
I will continue to monitor the situation and update clients in Real Time.
With decent weather and high 8´s in Chicago, Brazil can produce a damn
nice crop in 2016. We could be looking at 100mmt.
If soy prices drop to 7´s by October, could Brazil tap the brakes a little
bit and contract for 2016? answer- yes it is possible......
we read countless emails and articles about how this will
affect the soybean crop and eventually the 2nd crop corn.
I was in the heat of it with my opinions about crop size and
potential losses.
I remember watching the canal rual ag show in mid-November
interview a farmer from western Mato Grosso. He was adamant
that soy losses in western Mato Grosso would be 30%. I calculated
this and told clients that Mato Grosso has likely lost 1 million tons
of potential already.
At the end of the day, Mato Grosso had a bumper crop and record
production. The average yield for the state did drop about 1/2 bushel
per acre from 2014. This is an indicator that the drought and late planting
did have an affect, but with the increase in planted area of 5%, the overall
production was still an increase year over year.
January was record hot and dry for Goias state and areas to the Northeast.
It was easy to see that Goias would lose 1 million tons of potential. The question
would be if the state would lose 2 million tons???
Bahia, Piaui, and Maranhao states did remarkably well considering the conditions.
They increased area and productivity came in higher than 2014. I was not expecting
this to happen.
The two states that stand out this year were Tocantins and Para state. Tocantins had
Garden of Eden conditions. Tocantins increased area by 10% and production by 15%.
Para expanded area and production by 27%. We need to keep in mind that these
increases come from relatively small base lines. But the expansion in these areas cannot
be ignored. Two crop years go by and all of a sudden there is another million tons
of production that very few on the planet are aware of.
In summary, Brazil lost about 1 million tons of soybean potential this past season.
This occurred mainly in Goias state. The most recent Conab report stated that Brazil
produced 95 million tons of soybeans for 2015. Early on I was thinking more like
93 million tons should cap this crop.
Therefore, Brazil´s 2015 potential was 96 mmt. Period..........
Brazil expanded 1.4 million hectares this past season. I was not expecting that.
What can we divine from this for 2016?
I said last year that the more Brazil expands, the more she will contract later.
The dollar was 2.40:1 at the time - tight cashflows....
The FX currency exchange is the saving grace for the Brazil farmer for 2016.
The dollar at 3:1 keeps them in the game. Every hectare is a "blackjack".
Costs are going up. Fertilizer, chemicals and seed are higher in local currency
after they are imported. Some farmers are saving their own seed. Some are
cutting back on volumes of fertilizer. Will this affect productivity in 2016?
We do not know.....
A few that still had expansion plans are scrapping these projects. Conserve
working capital is the mantra at the moment. Banks are cutting back credit
lines and interest rates are on the rise.
At this time, I am not seeing Brazil expand for 2016. But at the same time,
she does not need to contract quite yet.
It is a "Check Mate" at the moment with Chicago. Who will flinch? Chicago,
Brazil soybean expansion, China, or will Argentina scare the daylights out
of everyone later in the year and bury the soybean market but good........
As long as dollar trades 3:1 to 3.30:1 between now and next February,
I think the Brazil farmer can tolerate these prices. If the dollar would drop to
2.50:1, the tears from all the farmers would flood the Amazon.
I will continue to monitor the situation and update clients in Real Time.
With decent weather and high 8´s in Chicago, Brazil can produce a damn
nice crop in 2016. We could be looking at 100mmt.
If soy prices drop to 7´s by October, could Brazil tap the brakes a little
bit and contract for 2016? answer- yes it is possible......
Saturday, May 16, 2015
China investment ideas, reality, etc
May 16th
It was an "other worldy" week for me. Events unfolded personally and in the media that had no connection to normalcy or reality of the current conditions.
The pernsonal stuff is best left for a soap opera writer to deal with.
The common underlying theme with Brazil is that is operates on pure, raw emotion.
If you cannot deal with drama, Brazil is not for you.
I did blow a gasket this week as events unfolded. It had been a while since the last
head gasket sprung a leak. It felt good to vent. It cost me 2 packs of cigarettes to
say I am sorry to my security guard. He received much Viking rage. He was just the
messenger and not the cause of the problems.
Family, booze, cat fights, dealing with hospitals and energy company mistakes all
came together and twisted my shear pin. Period....
To dovetail with the above "trip", I have read two different articles this week talking
about China and railroad investment???? Huh???
The East/West railroad was approved and announced back in March 2010. Not one
spadeful of dirt has been moved.
The government has announced that all infrastructure projects will be put on hold
during this period of fical austerity.
In the media, licensing of the North/South railroad through Mato Grosso/Para has been
announced. Great, let the licensing begin !!!!!!!! Keep he shovels in the garage!!!!
Next up was the 50 billion dollar announcement that China will be investing in a transcontinental
railroad across South America. The countries included are Peru, Bolivia and Brazil.
I am not sure why all of these pie in the sky projects are being talked about now.
One would think an election is coming up soon. This is not the case.
It is like taking a pain killer to avoid the current reality. Let us talk about this over there,
while cuts, zero growth, and lay offs are occuring over here.
The articles make no sense at the current time.
These projects might become reality one day, but that is years from now,
not 2015.
In 2015, we need to find the money to fill the holes in the road. At the moment,
contractors with Dept of Transport are 90 days past due on their invoices
and they are shutting all projects down !!!!!!!!!!!!!
It was an "other worldy" week for me. Events unfolded personally and in the media that had no connection to normalcy or reality of the current conditions.
The pernsonal stuff is best left for a soap opera writer to deal with.
The common underlying theme with Brazil is that is operates on pure, raw emotion.
If you cannot deal with drama, Brazil is not for you.
I did blow a gasket this week as events unfolded. It had been a while since the last
head gasket sprung a leak. It felt good to vent. It cost me 2 packs of cigarettes to
say I am sorry to my security guard. He received much Viking rage. He was just the
messenger and not the cause of the problems.
Family, booze, cat fights, dealing with hospitals and energy company mistakes all
came together and twisted my shear pin. Period....
To dovetail with the above "trip", I have read two different articles this week talking
about China and railroad investment???? Huh???
The East/West railroad was approved and announced back in March 2010. Not one
spadeful of dirt has been moved.
The government has announced that all infrastructure projects will be put on hold
during this period of fical austerity.
In the media, licensing of the North/South railroad through Mato Grosso/Para has been
announced. Great, let the licensing begin !!!!!!!! Keep he shovels in the garage!!!!
Next up was the 50 billion dollar announcement that China will be investing in a transcontinental
railroad across South America. The countries included are Peru, Bolivia and Brazil.
I am not sure why all of these pie in the sky projects are being talked about now.
One would think an election is coming up soon. This is not the case.
It is like taking a pain killer to avoid the current reality. Let us talk about this over there,
while cuts, zero growth, and lay offs are occuring over here.
The articles make no sense at the current time.
These projects might become reality one day, but that is years from now,
not 2015.
In 2015, we need to find the money to fill the holes in the road. At the moment,
contractors with Dept of Transport are 90 days past due on their invoices
and they are shutting all projects down !!!!!!!!!!!!!
Friday, May 1, 2015
May 1 update
April rains have gone a long way to making the 2nd crop corn. The 2nd crop is going to
be much better than I originally thought. The center-west part of Brazil has received
late season rains four years in a row. Given the late planting, this is very fortunate.
Conab will be out with another report May 12th, let us see what they do with the
corn and soybean numbers. I am thinking a small down tick in soybean number
and increase in corn number.
Funding for Brazil infrastructure projects are on hold. This is frustrating to those
waiting for years for roads and railroads to be completed.
This past week was the big Agri-show in Ribeirao Preto, SP. Equipment manufacturers
have had a difficult 1st quarter of 2015. Sales have been slow.
Most expect the 2nd half to better.
I think this will depend on how corn and soybean prices continue downward or
stablize in this area.
If corn is trading low 3 dollars and soybeans break into the 8´s, then I think 2nd
half of 2015 will be equally as weak as the 1st half.
Fertilizer sales have been a good leading indicator for the coming year´s soybean
expansion rate. Last year fertilizer grew by 5% and area grew by 5%.
As of the first quarter of 2015, the fertilizer sales rate is 5% below that of last year.
Many blame the lack of agricultural credit for this. The new plan is said to be announced
by May 19th.
I think with the strong dollar weak real relationship; soybeans remain the only game in
town as per planting for 2016.
I do not think we will see a decline in planted area in Brazil for soybeans, but I think the
era of 5%+ per year expansion has run its course. I think we platueau in this area of
31.5 million hectares and see where soybeans bottom out assuming a 4 billion bushel
USA crop for 2015.
I will update as I know more via my newsletter and VIP flash updates.
Drop me a note if interested.
agturbobrazil@yahoo.com
Kory
be much better than I originally thought. The center-west part of Brazil has received
late season rains four years in a row. Given the late planting, this is very fortunate.
Conab will be out with another report May 12th, let us see what they do with the
corn and soybean numbers. I am thinking a small down tick in soybean number
and increase in corn number.
Funding for Brazil infrastructure projects are on hold. This is frustrating to those
waiting for years for roads and railroads to be completed.
This past week was the big Agri-show in Ribeirao Preto, SP. Equipment manufacturers
have had a difficult 1st quarter of 2015. Sales have been slow.
Most expect the 2nd half to better.
I think this will depend on how corn and soybean prices continue downward or
stablize in this area.
If corn is trading low 3 dollars and soybeans break into the 8´s, then I think 2nd
half of 2015 will be equally as weak as the 1st half.
Fertilizer sales have been a good leading indicator for the coming year´s soybean
expansion rate. Last year fertilizer grew by 5% and area grew by 5%.
As of the first quarter of 2015, the fertilizer sales rate is 5% below that of last year.
Many blame the lack of agricultural credit for this. The new plan is said to be announced
by May 19th.
I think with the strong dollar weak real relationship; soybeans remain the only game in
town as per planting for 2016.
I do not think we will see a decline in planted area in Brazil for soybeans, but I think the
era of 5%+ per year expansion has run its course. I think we platueau in this area of
31.5 million hectares and see where soybeans bottom out assuming a 4 billion bushel
USA crop for 2015.
I will update as I know more via my newsletter and VIP flash updates.
Drop me a note if interested.
agturbobrazil@yahoo.com
Kory
Wednesday, April 22, 2015
Nice rains, dollar stable at 3:1, protests have fizzled
April 22
Brazil runs on emotion. It is the fuel of daily life. The politicians know this and prey on it during
elections and play to it during protests. It seems like the climate, the beer, and the girls all get mixed
together and prevent the public from staying pissed off for long periods of time.
It seems like it is easier to stay angry when the climate is cold, the beer is frozen and the
bars are full of guys. The testosterone provokes action and leads to some sort of change
of the status quo.
In Brazil, blue ball syndrom is less of an issue than in Northern hemisphere. Aggressive behavior
wanes in Latin America and, in the end, the issue passes and we worry about something else.
The above is an oversimplification of the cultures, but from a psychodynamic perspective, this
is not too far from the truth.
For the time being the impeach Dilma movement has fizzled.
For the time being, the truckers strikes have fizzled.
Nice rains the past four weeks will increase 2nd crop corn potentials.
Mato Grosso, MGDS and Goias have been very fortunate of late.
The big Agri-show is next week in Brazil. I will be watching for sales results.
I will also be working on May newsletter.
Brazil runs on emotion. It is the fuel of daily life. The politicians know this and prey on it during
elections and play to it during protests. It seems like the climate, the beer, and the girls all get mixed
together and prevent the public from staying pissed off for long periods of time.
It seems like it is easier to stay angry when the climate is cold, the beer is frozen and the
bars are full of guys. The testosterone provokes action and leads to some sort of change
of the status quo.
In Brazil, blue ball syndrom is less of an issue than in Northern hemisphere. Aggressive behavior
wanes in Latin America and, in the end, the issue passes and we worry about something else.
The above is an oversimplification of the cultures, but from a psychodynamic perspective, this
is not too far from the truth.
For the time being the impeach Dilma movement has fizzled.
For the time being, the truckers strikes have fizzled.
Nice rains the past four weeks will increase 2nd crop corn potentials.
Mato Grosso, MGDS and Goias have been very fortunate of late.
The big Agri-show is next week in Brazil. I will be watching for sales results.
I will also be working on May newsletter.
Tuesday, April 7, 2015
Soybean expansion continues - Dollar trumps CBOT
I am standing in 2nd year soybean field from pasture in NW Goias state.
This, historically, is pasture region in Brazil.
Rumor has it that one land owner on Mato Grosso side of river will prep 12,000 acres of pasture for soybeans in the coming months to be ready for November planting.
They let 16 and 18 dollar soybeans slide.
But dollar 3:1, let us plant soy !!!!
In the battle between soybean farmers and cowboys, the soybean farmers seem to be winning round ONE.
Saturday, March 7, 2015
Contrary to popular opinion, I am optimistic on Brazil
March 7
For two to three years now I have been writing blogs and newsletters about what could go wrong
with Brazil. All I saw were problems. I was not sure what the catalyst would be for a correction
in the Brazilian economy. I knew that dollar at less than 2:1 and the otherwise irrational exuberance
was the illusion and not the norm. I never dreamed that Brasil´s golden calf company, Petrobras,
would be the domino that started a chain reaction throughout the country exposing so much
corruption, incompetence, and lack of planning in multiple sectors at once - energy,
manufacturing, water, hydro-electric,banking, and ag infrastructure/roads-trucking.
The dollar is now 3.05:1. My old friend has returned. After the trillions the USA has spent trying to
stimulate its economy, I never thought I would see 3:1 again. I lived through dollar 1.55:1 twice.
I was the poor gringo surviving while the Brasilians went on global spending sprees. It was other
worldly to live through. My maid drove a nicer car than I had. I thought maybe I should be working
for her.
That illusion has come to and end. 3:1 is more normal for Brazil historically. Some say we are headed
to 3.5:1. I do not know. If we do trade there, it will be for a short period of time.
I am becoming more and more optimistic on Brazil. I know human nature is to tend to run the
opposite direction when there is crisis. I tend to be more like Warren Buffet and am attracted to the
things out of favor and be cautious when the herd is running in the same direction.
Back in 2004, Brasil ag land reached a hysteria phase with regards to demand and prices. The dollar
had been 3:1. There was much expansion and easy- high interest credit to fuel the fire.
In recent years, Brazil land has gotten expensive relative to returns. The cost of production is over
twice as much as back in 2004. Therefore, I have been hesitant to predict a new wave of expansion in
Brazil soybean area. Current prices are a godsend to those interior farmers who planted a soybean
crop in September/November looking at guaranteed losses. They are now seeing profits. But, they
must be careful as they plan ahead to 2016.
3:1 dollar makes Brazil land look mildly attractive again. The caveat to this is that wealthy people
tend to invest in fixed assets during these inflationary times. That tends to prop up prices and it
feeds on itself.
Overall, I am becoming more optimistic on Brazil. It is not that I know of some magic event around
the corner that will fix everything, but more so where we are at in the cycle. We are closer to a
bottom than a top. Brazil will likely go through some social and economic convulsions in the coming
months, but that will likely mark a capitulation in current events and then things will start to get better.
For those looking at Brazil, now is the time to be doing your due diligence. Do not wait for the
Economist or Wall Street Journal to tell you how great Brazil is. By then, we will be well on our
way again.
I will be in Mato Grosso the end of March on a crop tour and research mission.
April newsletter will have details of my trip.
http://www.brazilintl.com/states/matogrosso/korymelby/kory_newsletter/km_newletter.htm
http://www.brazilintl.com/states/matogrosso/korymelby/kory-cs/km-cs.htm
Kory
For two to three years now I have been writing blogs and newsletters about what could go wrong
with Brazil. All I saw were problems. I was not sure what the catalyst would be for a correction
in the Brazilian economy. I knew that dollar at less than 2:1 and the otherwise irrational exuberance
was the illusion and not the norm. I never dreamed that Brasil´s golden calf company, Petrobras,
would be the domino that started a chain reaction throughout the country exposing so much
corruption, incompetence, and lack of planning in multiple sectors at once - energy,
manufacturing, water, hydro-electric,banking, and ag infrastructure/roads-trucking.
The dollar is now 3.05:1. My old friend has returned. After the trillions the USA has spent trying to
stimulate its economy, I never thought I would see 3:1 again. I lived through dollar 1.55:1 twice.
I was the poor gringo surviving while the Brasilians went on global spending sprees. It was other
worldly to live through. My maid drove a nicer car than I had. I thought maybe I should be working
for her.
That illusion has come to and end. 3:1 is more normal for Brazil historically. Some say we are headed
to 3.5:1. I do not know. If we do trade there, it will be for a short period of time.
I am becoming more and more optimistic on Brazil. I know human nature is to tend to run the
opposite direction when there is crisis. I tend to be more like Warren Buffet and am attracted to the
things out of favor and be cautious when the herd is running in the same direction.
Back in 2004, Brasil ag land reached a hysteria phase with regards to demand and prices. The dollar
had been 3:1. There was much expansion and easy- high interest credit to fuel the fire.
In recent years, Brazil land has gotten expensive relative to returns. The cost of production is over
twice as much as back in 2004. Therefore, I have been hesitant to predict a new wave of expansion in
Brazil soybean area. Current prices are a godsend to those interior farmers who planted a soybean
crop in September/November looking at guaranteed losses. They are now seeing profits. But, they
must be careful as they plan ahead to 2016.
3:1 dollar makes Brazil land look mildly attractive again. The caveat to this is that wealthy people
tend to invest in fixed assets during these inflationary times. That tends to prop up prices and it
feeds on itself.
Overall, I am becoming more optimistic on Brazil. It is not that I know of some magic event around
the corner that will fix everything, but more so where we are at in the cycle. We are closer to a
bottom than a top. Brazil will likely go through some social and economic convulsions in the coming
months, but that will likely mark a capitulation in current events and then things will start to get better.
For those looking at Brazil, now is the time to be doing your due diligence. Do not wait for the
Economist or Wall Street Journal to tell you how great Brazil is. By then, we will be well on our
way again.
I will be in Mato Grosso the end of March on a crop tour and research mission.
April newsletter will have details of my trip.
http://www.brazilintl.com/states/matogrosso/korymelby/kory_newsletter/km_newletter.htm
http://www.brazilintl.com/states/matogrosso/korymelby/kory-cs/km-cs.htm
Kory
Saturday, February 21, 2015
Wet week
Feb 21
Harvest was slow this past week in Mato Grosso. In some areas it rained
everyday. This is normal to have a two week wet spell this time of year.
It puts the 2nd crop corn planting at greater risk. One month delay in October
combined with another two weeks in February puts most of the crop to
be planted after the ideal planting window. Production potential is at risk.
Mato Grosso has a nice carryover of last year´s corn crop on hand yet.
The percent of 2nd crop planted as of March 1 will be important stat.
It will likely be the slowest planting pace ever.
With big toys and BT genetics, they can catch up quick.
The next Conab report will be out March 10th. I expect to see
cuts in Bahia soy crop as well as added cuts in Goias, Minas Gerais,
and Sao Paulo.
Spot soybean bids have been firm in Mato Grosso recently with weaker REAL
and demand for spot soy. Once the sun shines again, these bids will drop like a
rock.
Prices are better for soybeans than what I was thinking back in October.
Farmers will have a chance to sell some on a spot basis and then hold the rest
as an inflation hedge for later. They will make some money this year but the weak
Real means higher cost of production for 2016. This means growing pains ahead.
I doubt we will see any expansion in soy area for 2016.
The 2015 surge likely blew the top off the the recent Brazil soybean surge of
6 million + hectares in four years. Time to take a breather.
Argentina looking good, but they will likely sell their soybeans on their estate sale
and not in the immediate future. New government in early 2016 will force them
to hope for a better future and bet on the Come line. Come 7/11??? or Argentine
Craps? stay tuned..........
Harvest was slow this past week in Mato Grosso. In some areas it rained
everyday. This is normal to have a two week wet spell this time of year.
It puts the 2nd crop corn planting at greater risk. One month delay in October
combined with another two weeks in February puts most of the crop to
be planted after the ideal planting window. Production potential is at risk.
Mato Grosso has a nice carryover of last year´s corn crop on hand yet.
The percent of 2nd crop planted as of March 1 will be important stat.
It will likely be the slowest planting pace ever.
With big toys and BT genetics, they can catch up quick.
The next Conab report will be out March 10th. I expect to see
cuts in Bahia soy crop as well as added cuts in Goias, Minas Gerais,
and Sao Paulo.
Spot soybean bids have been firm in Mato Grosso recently with weaker REAL
and demand for spot soy. Once the sun shines again, these bids will drop like a
rock.
Prices are better for soybeans than what I was thinking back in October.
Farmers will have a chance to sell some on a spot basis and then hold the rest
as an inflation hedge for later. They will make some money this year but the weak
Real means higher cost of production for 2016. This means growing pains ahead.
I doubt we will see any expansion in soy area for 2016.
The 2015 surge likely blew the top off the the recent Brazil soybean surge of
6 million + hectares in four years. Time to take a breather.
Argentina looking good, but they will likely sell their soybeans on their estate sale
and not in the immediate future. New government in early 2016 will force them
to hope for a better future and bet on the Come line. Come 7/11??? or Argentine
Craps? stay tuned..........
Sunday, February 8, 2015
Nice rains, Conab, soy crop gets smaller
The soy crop is getting smaller. The truth is finally coming out.
Rains have returned to the Cerrado. In many cases it will be too late.
Yields have been nipped. Harvest is at full speed now in Mato Grosso.
I think that crop is also a bit smaller than some think.
IMEA will be out Monday with new numbers.
Conab on Thursday. I will send out special report to subscribers.
I have VIP consult on Tuesday.
Carnival starts this Friday for many. Brazil will be on cloud 9 from
Feb 13-noon Feb 18th. Whatever mode........
Car and ag machinery sales are off to a very slow start in January.
Slowest since the global crisis of 2009.
Corn crop is going in fast behind the combines.
Will better prices entice farmers to plant a bit more than expected?
Stay tuned.
Optimum planting window closes Feb 26th for many locals.
Water and energy will be the major buzz stories for Brazil in 2015.
Crisis of Biblical proportions for many.
Rains have returned to the Cerrado. In many cases it will be too late.
Yields have been nipped. Harvest is at full speed now in Mato Grosso.
I think that crop is also a bit smaller than some think.
IMEA will be out Monday with new numbers.
Conab on Thursday. I will send out special report to subscribers.
I have VIP consult on Tuesday.
Carnival starts this Friday for many. Brazil will be on cloud 9 from
Feb 13-noon Feb 18th. Whatever mode........
Car and ag machinery sales are off to a very slow start in January.
Slowest since the global crisis of 2009.
Corn crop is going in fast behind the combines.
Will better prices entice farmers to plant a bit more than expected?
Stay tuned.
Optimum planting window closes Feb 26th for many locals.
Water and energy will be the major buzz stories for Brazil in 2015.
Crisis of Biblical proportions for many.
Sunday, February 1, 2015
February starts on dry note
We had one good rain in January- that was it.
In Goiania we are running at about 10% of normal rainfall for the last
30-40 days.
There is more and more talk of water rationing for Rio and Sao Paulo regions.
The forecast for the next 10 days is for 100 mm. This will be nice and not one
minute too soon.
Soybean harvest will move into high gear now. The bulk of the crop will
be harvested in the next 30 days. Early yields were erratic-just like the start
of planting. Soybeans need water with heat like we have had. A common theme
among farmers is that it was too hot during podding. The yields are a bit less
than expected.
The heart of Mato Grosso is doing well. Large farms are averaging 57 sacs
per ha which is on par with last season.
The recent crop size forecasts of 95 mmt are still too high. Conab will be out
February 12th. They will decrease a bit. It will take 1 or 2 months before they do
the full monty again.
I am not there yet, but in the back of my mind I sometimes wonder if this crop
might only be 90 mmt. We will see who wins this year- agronomists or crop forecasters
sitting in the office looking at satellite images.
The Brazil economic situation is surreal at the moment. As ridiculous as it was to live through
Dollar/Real at 1.50:1 a few years back, it is becoming just as surreal in the other direction now.
Dollar hugging 2.70:1, inflation, everything is becoming more expensive all the way down to
a 12 inch Subway sandwich. Gasoline and diesel are on the increase as well as local taxes.
GDP is now shrinking and layoffs are occurring in manufacturing sectors.
Energy costs are set to rise as the government buys energy from Argentina and buys more
and more LP gas from Bolivia to run the generators to fill in the power gaps from lack of
hydro power. I wonder how much more the Brazilian public will tolerate?
I keep getting emails from young men in USA that want to work or buy cheap land in Brazil.
I know this blog is read by thousands and I welcome the emails. But, if one wants to participate
in Brazil, one needs to ask the right questions. How can I learn Portuguese? How could I do some
work study on a farm or business to gain cultural experience. What is tax system like?
Can I work in Brazil on a tourist Visa? What is cost of living like?
I cannot imagine wanting to come to Brazil without doing some due diligence first.
Subscribing to newsletters, reading expat blogs, chatting with other Americans here
that are veterans- no matter what the cost.
Brazil will eat you alive if you are not mentally, emotionally and financially ready for
her ups and downs. The happy medium does not last for long. You either live in AC or
DC here depending on the decade.
In Brazil you need to invest and believe in yourself. Brazil will not invest in you.
Brazil will take from you until you have had enough. You must first survive before
you can thrive here. Period .......
In Goiania we are running at about 10% of normal rainfall for the last
30-40 days.
There is more and more talk of water rationing for Rio and Sao Paulo regions.
The forecast for the next 10 days is for 100 mm. This will be nice and not one
minute too soon.
Soybean harvest will move into high gear now. The bulk of the crop will
be harvested in the next 30 days. Early yields were erratic-just like the start
of planting. Soybeans need water with heat like we have had. A common theme
among farmers is that it was too hot during podding. The yields are a bit less
than expected.
The heart of Mato Grosso is doing well. Large farms are averaging 57 sacs
per ha which is on par with last season.
The recent crop size forecasts of 95 mmt are still too high. Conab will be out
February 12th. They will decrease a bit. It will take 1 or 2 months before they do
the full monty again.
I am not there yet, but in the back of my mind I sometimes wonder if this crop
might only be 90 mmt. We will see who wins this year- agronomists or crop forecasters
sitting in the office looking at satellite images.
The Brazil economic situation is surreal at the moment. As ridiculous as it was to live through
Dollar/Real at 1.50:1 a few years back, it is becoming just as surreal in the other direction now.
Dollar hugging 2.70:1, inflation, everything is becoming more expensive all the way down to
a 12 inch Subway sandwich. Gasoline and diesel are on the increase as well as local taxes.
GDP is now shrinking and layoffs are occurring in manufacturing sectors.
Energy costs are set to rise as the government buys energy from Argentina and buys more
and more LP gas from Bolivia to run the generators to fill in the power gaps from lack of
hydro power. I wonder how much more the Brazilian public will tolerate?
I keep getting emails from young men in USA that want to work or buy cheap land in Brazil.
I know this blog is read by thousands and I welcome the emails. But, if one wants to participate
in Brazil, one needs to ask the right questions. How can I learn Portuguese? How could I do some
work study on a farm or business to gain cultural experience. What is tax system like?
Can I work in Brazil on a tourist Visa? What is cost of living like?
I cannot imagine wanting to come to Brazil without doing some due diligence first.
Subscribing to newsletters, reading expat blogs, chatting with other Americans here
that are veterans- no matter what the cost.
Brazil will eat you alive if you are not mentally, emotionally and financially ready for
her ups and downs. The happy medium does not last for long. You either live in AC or
DC here depending on the decade.
In Brazil you need to invest and believe in yourself. Brazil will not invest in you.
Brazil will take from you until you have had enough. You must first survive before
you can thrive here. Period .......
Sunday, January 11, 2015
Show Safra 163 2015 at Lucas do Rio Verde March 24-27th
I will be hosting an ag tour March 23 - 27th.
We will stop at the Ag show at Lucas.
Seed, chemical and ag machinery.
It will be a quick trip through Mato Grosso the week of.
Contact me at agturbobrazil@yahoo.com for more info.
Saturday, January 10, 2015
1 million semi loads and counting
The weather has sure been erratic the past 10 days.
Here in Goiania, we have not received a drop.
In Mato Grosso, they have been getting daily showers that
keep them alive. It has been perfect early harvest weather and
soybeans have been shipped to crushers right from the field.
Very little or no drying needed.
Goias and Bahia are going to be hurt by this drought.
How much will it be? Anyone´s guess as of today.
Will it be a disaster? No
It will nip the top end potential off this crop by a bit.
A normal single trailer semi hauls 28 ton in the box.
Double trailers haul about 50-52 ton in the boxes.
With Mato Grosso coming in at 28 million ton this year,
she will break the 1 million semi load threshold.
In 2014, Illinois produced 550 million bushels of soybeans
and Iowa came in at just above 500 million bushels.
13.6 to 15 million metric tons respectively.
Iowa produced 485,000 semi loads of soybeans in 2014.
I think this helps build some perspective about how many
soybeans are produced in Mato Grosso.
To grasp the volume of truck traffic on dirt roads that
must exit via BR 163 is staggering.
Mato Grosso soybean crop will be fantastic. It is the healthiest
crop in many years. February could still throw a wrench into
things, but for now, it is looking good.
Goias and Bahia continue with yellow alert warning.
Thank you to all the new subscribers last week.
regards
Kory
Here in Goiania, we have not received a drop.
In Mato Grosso, they have been getting daily showers that
keep them alive. It has been perfect early harvest weather and
soybeans have been shipped to crushers right from the field.
Very little or no drying needed.
Goias and Bahia are going to be hurt by this drought.
How much will it be? Anyone´s guess as of today.
Will it be a disaster? No
It will nip the top end potential off this crop by a bit.
A normal single trailer semi hauls 28 ton in the box.
Double trailers haul about 50-52 ton in the boxes.
With Mato Grosso coming in at 28 million ton this year,
she will break the 1 million semi load threshold.
In 2014, Illinois produced 550 million bushels of soybeans
and Iowa came in at just above 500 million bushels.
13.6 to 15 million metric tons respectively.
Iowa produced 485,000 semi loads of soybeans in 2014.
I think this helps build some perspective about how many
soybeans are produced in Mato Grosso.
To grasp the volume of truck traffic on dirt roads that
must exit via BR 163 is staggering.
Mato Grosso soybean crop will be fantastic. It is the healthiest
crop in many years. February could still throw a wrench into
things, but for now, it is looking good.
Goias and Bahia continue with yellow alert warning.
Thank you to all the new subscribers last week.
regards
Kory
Thursday, January 1, 2015
2015 arrives on a dry note
Normally January weather is a non issue for the Center-West part of the country.
Soybean crop is made and harvest is in full swing.
This year it is different.
The bulk of the soybean crop was planted about 30 days later than normal.
This makes a situation where we need December weather in January.
Normally we would see about 300 mm in January or 12 inches of rain.
The new 2 and 3 week forecasts call for a fraction of that amount.
The bulk of the last planted soybeans will be trying to fill the pods in the
coming weeks.
We have never experienced a situation quite like this. Especially not on record planted acres. Sandy soils and newer less fertile soils will be the first affected. The heavier clay soils will likely roll through this unscathed.
The point of this blog update is the point out that this crop is not made yet.
The crop looks beautiful, but it is late.
We need to watch this unfold the next 4-6 weeks.
If January is dry through the Cerrado, we will loose X % of the soybean crop.
Then come February and rains during harvest, this creates even more headaches
and delays.
The timing for planting 2nd crop corn has no more cushion to work with.
It must be planted Feb 5th- Feb 25th.
How much gets planted? Anyone´s guess today......
I will be monitoring with flash updates.
http://www.brazilintl.com/states/matogrosso/korymelby/kory_newsletter/km_newletter.htm
Soybean crop is made and harvest is in full swing.
This year it is different.
The bulk of the soybean crop was planted about 30 days later than normal.
This makes a situation where we need December weather in January.
The new 2 and 3 week forecasts call for a fraction of that amount.
The bulk of the last planted soybeans will be trying to fill the pods in the
coming weeks.
We have never experienced a situation quite like this. Especially not on record planted acres. Sandy soils and newer less fertile soils will be the first affected. The heavier clay soils will likely roll through this unscathed.
The point of this blog update is the point out that this crop is not made yet.
The crop looks beautiful, but it is late.
We need to watch this unfold the next 4-6 weeks.
If January is dry through the Cerrado, we will loose X % of the soybean crop.
Then come February and rains during harvest, this creates even more headaches
and delays.
The timing for planting 2nd crop corn has no more cushion to work with.
It must be planted Feb 5th- Feb 25th.
How much gets planted? Anyone´s guess today......
I will be monitoring with flash updates.
http://www.brazilintl.com/states/matogrosso/korymelby/kory_newsletter/km_newletter.htm
Happy New Year
Kory
* buy all the coffee you need for 2015 now !!!!
Subscribe to:
Posts (Atom)