Soy Harvest Heating up in Brazil
Soybean harvest in Parana, Brazil’s 2nd largest soy producing state, reached 25% according to Deral, well ahead of last season.
Although the state suffered through a mini drought in December, early yield results show no material losses.
Only 6 percent of the state's soy fields are in bad condition, compared to none last year, Deral said. Another 24 percent are considered "average," compared to 14 percent in the previous cycle. The remaining fields are considered in good condition.
What it means for the farmer? The weather issues in Brazil are not widespread nor significant enough to put a major dent in production. Yes, Brazil’s crop will be off from record high estimates of 122 MMT. But unless we start to see enough issues that get the crop under 110 MMT it will be difficult for the market to take the threat as price enhancing. Keep in mind Argentina is having a good crop (although they are still early in the season) with expectations of a 53 to 55 MMT crop there vs 38 last year.
Export Sales Announcements
Export sales of 586,000 metric tons of soybeans for delivery to China. Of the total, 523,000 metric tons is for delivery during the 2018/2019 marketing year and 63,000 metric tons is for delivery during the 2019/2020 marketing year.
Export sales of 182,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.
Wheat Exports in Focus
Farm office FranceAgriMer on Wednesday increased its forecast for French soft wheat exports outside the European Union in 2018/19 to 8.85 MMT from 8.7 MMT last month.
Ukraine on the other hand is lagging a bit on YTD exports. The ag ministry there pegged YTD shipments at 11.5 MMT compared with 12.3 MMT in the same period last season.
In Russia, the ag ministry put out a statement this morning that they export the country’s torrid wheat exports to slow in the later half of the marketing year. High domestic prices are expected to curtail exportable supplies.
Last week Russia lost out on the Egypt’s GASC wheat tender due to elevated prices. The ministry also expects prices to start to come down as farmers sell inventories to pay for spring sowing.
What it means for the farmer? The story in August that led to the futures rally was Russia would eventually run out of exportable supplies, leaving a window for the U.S. in the Jan-June time period. But that opportunity is shrinking with plenty of other competitors stepping in to fill the void. USDA will likely need to lower it’s annual wheat export forecast on Friday from 1,000 MB to 950 to 975.
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