Headlines
Private exporters reported to the U.S. Department of Agriculture export sales of 20,000 metric tons of soybean oil for delivery to unknown destinations during the 2017/2018 marketing year.
Brazil Ends Trucker Strike
Brazil's government struck a deal with truck drivers on Thursday to suspend a four-day protest. Truckers agreed to immediately suspend the strike for 15 days. Under the deal, a 10% price cut for diesel will be extended to 30 days. But normalization of trucking & logistics will take weeks to recover because of the magnitude of disruptions across numerous industries. At Paranaguá port, Brazil's second-largest grain export hub, the protests impeded 1,000 trucks from delivering goods over two days, Brazil's largest cooperative Coamo Agroindustrial said on Thursday.
South America Crops Continue to Slip
Brazil’s AgroConsult pegged the 2nd season corn crop at 57 MMT, down from their previous estimate of 60 MMT based on their ongoing crop tour. If realized it would be a 10 MMT shortfall relative to last year. They also estimate the country will only export 24 MMT of corn, a far cry from USDA’s estimate of 30 MMT. In Argentina, the Ag Ministry lowered their latest old-crop soybean production estimate to 36.6 from 37.2 MMT and off from USDA at 39.0
Argentina Government May Renege on Export Taxes
In a political bait-and-switch, Argentina may halt the gradual lowering of soybean export taxes to bail out the government ballooning budget woes.
President Macri was elected in 2016 on a populist support from ag by promising to gradually reduce the 35% export tax on soybeans and outright elimination of the tax on corn and wheat. The soybean tax currently stands at 27.5% and was expected to be eliminated by the end of 2019. It’s not clear that the budget coffers would benefit much in the short-run as the country has been crippled from drought creating limited excess supplies to export. Nonetheless, if the tax policies are rolled back it will likely lead to aggressive selling by Argentina farmers to front-run any new enacted taxes
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