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

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.

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 .......