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