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