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.


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