Saturday, March 17, 2018

March 18 update

I will not be attending the Lucas do Rio Verde ag show this year.

I will be attending the Ribeirao Preto, Sao Paulo ag show this year.
April 30-May 5th.

I will send out a special May newsletter after that trip.

The soybean market has been tracking as to my expectations laid
out two months ago. 

After we digest the March 29th report, I think we will resume our

The Brazil soy crop situation seems to want to get bigger.
High flyers are at 116-117 mmt.

Conab has been conservative and I would tend to agree.
However, I do expect Conab to increase their crop size again
in April. Remember, they are a gov't arm. If they have the data,
they would love to report a new record high soybean crop size.
If they do not go bigger than last year, that also speaks volumes
in my mind.

The Brazil corn situation remains dynamic. The low prices last year combined
with late soy planting and a wet harvest should have pulled planted acres lower
this year. However, the crop looks fantastic in central and western MT. 
This all comes down to rain in May. The indications are there that these rains
will come this year. This means the BR corn producer is going to get lucky
planting late. Prices are on the rise. The spot market is short of corn.
Brazil seems like it exported plenty again. Maybe a bit too much.
There is talk of importing a few boat loads into southern BR.

At the moment the worst case scenario of 80 mmt for BR total corn is
off the table. The crop should be 85 mmt+.

I have seen photos of corn by Lucas do Rio Verde that is denting.
It was planted Dec 17th. This is an exception to the rule, but there
will be new crop corn being harvesting in late April in MT. 
Nice spot price at the moment to deliver into. 

Parana and MGDS are still at high risk for early frost damage. If no frost,
they too will produce some corn and this will stabilize everything.

Argentina is the wild card. We sure have a wide range of crop sizes again.
I see images of terrible soy and corn and then I see a guy harvesting 100 bu per acre soy. 
Yes  soybeans !!!

I shake my head.....

I think we trade lower in and through the March USDA report until the combines
get rolling in ARG. The yield reports should allow the market to base and then rally
again. We have just enough of a problem to keep things interesting.

The ARG losses were larger than BR's ability to compensate.

We also have some losses in Uraguay and Paraguay that add up too.

Rio is a war zone these days. This will likely disrupt the politics nationally
too. The Presidential race is wide open. Lula is down for the count.
And the World Cup in the middle with Neymar recovering from knee surgery
makes this an intense time for the Brazilian male.

Thank you for all the subscribers that responded to my query for feedback
on the newsletters and technical updates.  Much appreciated.

I will put together an April newsletter in near future. I will recap things
as to how things played out in Brazil as per acreage switch and an update
on how I see things post USDA report.

Drop me a note if any questions.

keywords: BR soy, BR corn, BR agshow, Argentina,