Sunday, February 18, 2018

Feb 18th blog

Hi everyone,

The past two weeks have been kinda exciting.

The trucking crisis on BR 163 lasted only one week compared
to one month last year. The military helped a lot there.

A few spots received too much rain and caused some soybeans
to sprout and mold. Nominal losses.

Parana is so very slow to harvest.

Parana moved the 2nd crop corn planting deadline for crop insurance
from Feb 10th to Feb 20th. This made sure at least a few hectares got planted.

Some will likely plant 2nd corn into March with idea of getting lucky
with May rains. Farmers have short memory's.

Soybeans have rallied as expected from the Jan 12th low.
I believe that was a significant low.

I am still looking for higher prices.

It looks like Argentina will come in at least 10 mmt less than
original expectations. We can probably knock a million ton
off of Uraguay and Paraguay too.

The numbers are starting to add up.

I have been thinking Brazil was between 112- 114 mmt.
The ranges have been from 112- 118 mmt.

A few high flyers have been thinking 116-117 mmt.

I think the Brazil soybean crop plateaued three weeks ago.

It is still a hell of a crop, but the high flyers will now need to
lower their numbers a little in the coming weeks.
Pyschologically reenforcing the Bull

Parana is coming in less than last year with low seed densities.
RGDS also is suffering drought along its southern border and
early soy yields are less than last year.

Mato Grosso still has a chance at coming in at 31 mmt.

Argentina farmers are in no hurry to sell. Each month they gain
1/2% with less export withholding taxes.

Brazil farmers are also looking for a bit more before they sell

I believe the old crop carryovers in USA will come down as crush
is increased and demand shifts back to USA.

I believe that China will not mess with USA in soybean trade war now
that Argentine crop is shrinking. There is no use to poke the Bear when
a Bull could awaken. They can still get 10.25 soybeans.
If they mis-step and Argie crop is much smaller and USA has a weather issue,
beans could be 13 bucks quickly, so why slap a tarriff on beans in a bull market??

The irony in Argentina. Bunge is/was in the middle of expanding the
Rosario crusher from 20,000 tons per day to 30,000 tons per day.
And now can't originate beans?

The early frosts in Argentina also have my attention. The climate is
acting goofy again. It looks like we need to be ready for the black swan
events moreso than assuming all is normal.

After I see how markets act on Tuesday, I will update technical
probabilities in soy market in the March newsletter.

Lucas ag show is coming up in March also. I am not sure if I will
go out then or wait until June and do a corn crop tour.

My son goes to school six days a week. The next 6 weeks until
Easter are intense here on a personal level.

The more important trend long term in Brazil is what will happen
in Oct this year. National elections are coming.
The military has taken over policing operations in Rio de Janeiro.
There is also movement to more enforcement in Goias also.

Brazil is moving to the RIGHT. The public wants order restored.
At what cival liberty cost?  Unknown today

How far Right can Brazil go by Oct is what everyone should be
asking when talking about Brazil and or doing buisness here.
Things could change fast in 2018.

* Keep an eye on Argentina for fires and lack of water for cows.


* Keywords: Brazil soy, Argentina soy, infrastructure, politics, weather, soy technical