Export Sales Announcements
- Export sales of 264,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.
- Export sales of 120,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.
- Export sales of 360,500 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.
Brazil Soy Area to Expand
- US soybean future prices hit two year highs on Wednesday, supported by demand from China and speculative funds.
- AgRural is projecting the soy-growing area in Brazil’s north and northeast to increase by 6.4%, while Arc Mercosul expects 6.8% growth.
- Both consultants forecast the regions to add more than 350,000 hectares, or 865,000 acres, for 2020/21.
- The center-west, which includes top producing state Mato Grosso, is forecast to add 463,000 hectares, up 2.8% from last year
- The soy fields will expand into newly deforested areas, previously created pastures, and marginal lands, due to the record profitability of planting soy.
- The Brazilian government has encouraged expansion and praised the farmers for feeding the world.
- The latest USDA forecast pegs Brazil soy production at 126 million tonnes (4,630 million bushels), up 5.3% from 119.7 million last year.
- Producers have already pre-sold around 50% of the 2020/21 crop, with planting set to begin this month in the center-west region.
FBN’s Take On What It Means: A weak currency, supportive government and high world prices have incentivized the increase in Brazil’s soy planted area. The new acres may provide a buffer in the event of poor growing weather this coming season. The US will face stiff competition from Brazil from February forward when the South American harvest starts.
U.S. May Plant More Beans 2021/22
- Farm Futures reported survey results for 2021/22 acreage, and soybean plantings were forecast up 5 million acres to 87.9 million.
- Corn planted area was projected almost equal to this year at 91.8 million acres.
- November soybean futures are up 15% since the August 12 report from the USDA.
- The ratio of next-crop 2021 soybeans to corn favors soybean plantings next spring by the largest degree in three years.
- China is expected to continue making large purchases of US soybeans to feed their expanding livestock population.
FBN’s Take On What It Means: Obviously it is very early and much can change before next spring, but the bean/corn ratio has been a decent predictor of acreage shifts. China demand remains key to supporting the ratio going forward.
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