Sunday, October 8, 2017

Oct 8th blog update

The clock is ticking

High and dry in Cerrado states and too much rain in southern Brazil.

It is too soon to kill the BR crop.

It is difficult to bet against the new soy seed technology.

We have seen many times the past two years where we have an
early dry spell and then a shot of rain at the end makes for fantastic
bean yields- in both hemispheres.....

Mato Grosso cotton producers are now flipping to a super short
season soybeans. 85-90 day soy

This now pushes us into mid- January for harvest. This can be risky
as per timing to get cotton in the ground in the ideal window.

The forecast is dry for another two weeks. Some producers may opt
to forego planting soybeans ahead of the cotton with the idea of planting
a single crop of cotton in December and maximize the yields on that crop
instead of trying to deal with a half a crop of soybeans ahead of the cotton.

This next week is a tipping point as to making these decisions.

Conab is out on Tuesday morning with their first look at 2018
planted area and production.

BR range for soybeans is from 106.5 to 114.5 mmt so far.
Last year at this time we were looking at 102-105 mmt of potential.
End result was 114 mmt.

Now we are looking at planting at least another 1 million hectares compared
to 2017. Unless we start to pull acres away in favor of cotton.

Argentina looks to be planting 1 million hectares less soybeans than last year.
Flooded areas and corn are changing the mix.

We now look to USDA on Thursday. After two months of yield increases
will they choose to decrease the avg yield?
With all of the yield reports I have heard, no one is saying the USDA is wrong anymore?

I will send out a Conab highlights newsletter to subscribers after the Conab report

This year is starting out exactly opposite of 2016-2017. It is eerily similar
to the 2015-2016 crop year and also the 2010-2011 crop year.  Late start
with droughty tendencies.

China continues to be in the news every week in Brazil. In my mind, the
Chinese are playing a much bigger game in South America than most
of us can imagine today.

China needs South America's food. If anyone decides to get cute in future,
China needs an Ace or two in the hole. If the soybeans get cut off, maybe
Brazil's power grid will undergo a sudden maintenance period. Maybe Brazil's phone
and internet system will have a black out. Maybe Chinese beans at port will
take priority over another country's shipment of soy.

I think the Quid pro Quo dynamics between China BR and ARG have just begun.
Add in some war and economic sanctions with North Korea, things get really
interesting as per how China handles this.

Brazil seems destined to shift hard left or hard right in next election. Brazil
might look like USA in one year. 50% of the population is pissed off all of
the time. This seems to be the new norm !!!!

Have a great week,


keywords: BR soy, Conab, China, crop size, acreage switch, short season soy