By Daniele Siqueira
Although this column is called “South American Crop Update”, as a Brazilian I usually write about… Brazil. This time, however, I ask my Argentine colleagues for permission to say how sorry I feel for their country and especially for their farmers. No, I am not being ironic. Although the measures recently announced by their new government are likely to benefit Brazilian agricultural exports (and the US exports as well!), that is definitely not the way farmers should be treated by any government – especially farmers who do so much for their country’s economy as a whole.
Leftist Alberto Fernández, the new President of Argentina, took office just a few days ago, but is already making history in Argentina’s long record of presidents who specializes in bad agricultural policies. Among other measures aimed to start fighting a serious economic crisis, his emergency bill sent to (and approved by) Congress last week raises export taxes on agricultural goods such as soybeans, soy meal, soy oil, corn and wheat.… Continue readingRead More »
The preliminary agreement announced last week by the United States and China was the most important step towards softening tensions between the world’s two largest economies since the beginning of the trade war in 2018. But it is still surrounded by uncertainty. For the agricultural sector, the main question is how much soybeans, meat, wheat, corn, cotton, etc. is China going to purchase from the United States in 2020. For Brazil, that is a key question, since its agricultural exports have been immensely benefited by the trade war.
In 2018, Brazil exported 83.3 million metric tons of soybeans, 22 percent up from the previous year and a massive fresh-new record. China was the destination of 68.2 million metric tons, compared to 53.8 million in 2017 (28 percent up). Since Chinese importers made all efforts to buy as much as possible from Brazil (to make things worse for China, Argentina had had a crop failure that year), they inflated Brazilian export premiums.
Last week, President Trump tweeted that he would restore tariffs on all steel and aluminum that Brazil and Argentina export to the United States. He would do that because, according to his tweet, the two South American countries “have been presiding over a massive devaluation of their currencies”, which is “not good” for American farmers.
He is right. The devaluation of the Brazilian real and the Argentine peso really is a bummer for American farmers. It makes producers in those countries happy with the price received for the products they ship, and that spurs farmer selling. At the same time, prices in U.S. dollars paid by importers don’t necessarily climb – sometimes they even fall, making South American exports more competitive when compared to products shipped by the United States.
A metric ton of Brazilian soybeans priced at $350 FOB Santos, for example, equals to BRL1,050 when the Brazilian real is at BRL3 to the dollar.… Continue readingRead More »
The soybean planting in south-central Brazil is now relatively on pace with historical averages, but irregular rains in September, October and early November resulted in delays in several states. Those delays are not likely to cause yield losses to the soybean crop, but will result in a narrower planting window for the second corn crop (“safrinha”), which is planted right after the soybean harvest. A later-than-normal harvest will lead to a delayed start to the corn planting and, probably, to an extension of the planting season into March.
How bad is planting in March?
Planting corn in March is not unusual. On the contrary, since the ideal planting window ends in mid-March in several Brazilian regions. But planting in March normally results in more risk, because corn will pollinate under potentially harmful weather conditions: lack of moisture, shorter days and even freezing temperatures in some areas. That’s why farmers are always planning on planting as soon as possible.
Some Brazilian regions still have serious logistical problems, especially when compared to the United States. In 2018, the cost per metric ton to ship soybeans from Davenport, Iowa to Shanghai, China through the U.S. Gulf reached $88.80, according to USDA data. For Sorriso, Mato Grosso (Brazil’s top producer state), shipping soybeans to the same Chinese region, using the Brazilian port of Santos, cost $122.08 per metric ton.
That difference, of course, means that farmers who grow soybeans in Sorriso, located 1,190 miles from the port of Santos, in southeastern Brazil, received less for their production.… Continue readingRead More »
Even if the mere idea of visiting Brazil has never crossed your mind, you probably have listened to a song called “The Girl From Ipanema”, maybe in Frank Sinatra’s voice. And what does that song have to do with agricultural markets?
Nothing. But one of its composers, Brazilian Tom Jobim (who sings the song with Sinatra), once said that Brazil is not for beginners. That sentence became a famous and useful way to describe how difficult it is to understand Brazil’s peculiarities. And its corn market is one of them.
As you probably know, Brazil grows two corn crops a year. Well, since last October, it is officially three, but I will write about that third crop another time. For now, let’s stick to the two traditional crops. The first one is planted from September to December and competes for area with soybeans.
Considering that Brazil is now a soybean powerhouse, it is not a surprise that the first corn crop has lost millions of acres over the last two decades.… Continue readingRead More »
Brazilian farmers had planted 58 percent of their 2019/20 soybean area by Nov 7, according to a weekly survey conducted by AgRural. That represents a progress of 12 percentage points in one week and keeps the new crop planting pace slightly ahead of the five-year average. There is still a delay, however, in comparison to last year.
Favorable weather conditions seen last week took the area already planted to 94 percent in top-producer Mato Grosso, where the soybean crop develops well so far. The only issue, for now, is that the state will not have new soybeans entering the market as early as in the 2018/19 season, when some farmers were already harvesting in late December.
Mato Grosso grows about 65% of Brazil’s second corn crop, which will be planted right after the soybean harvest, in January and February 2020. That means that a good chunk of the Brazilian corn crop will not be behind schedule or have any significant problem caused by delays in the soybean planting.
By Daniele Siqueira, AgRural
Another crop season is underway in Brazil and things have not started exactly well for soybeans. And a poor start to the soybean crop always fuels speculations about the second corn crop, which is planted in the beginning of the year, right after the soybean harvest, and accounts for about 70% of Brazil’s total corn production and almost the entire corn export program. That’s why many people are already asking about the second corn crop planting window. Is Brazil going to cut its corn acreage in 2020 due to the soybean delay?
By Oct 17, Brazilian farmers had planted 21% of their intended area, compared to 34% in the same period a year earlier and also 21% on the five-year average, according to consultancy AgRural.
In top producer Mato Grosso, the soybean planting caught up after a slow start in September, and about half of its area was already planted by Oct 17.… Continue readingRead More »