Little Damage Expected from Freezing Temps

Brazil Dry Season Starts Soon

• Early May is expected to be seasonably dry and crops will be forced to develop off of subsoil moisture which may be limited.

• Mato Grosso and portions of Mato Grosso do Sul received enough rain during the past week to maintain good conditions.

• Rainfall was spotty in the other safrinha corn areas and concern over moisture shortages is increasing.

• Parana, Sao Paulo, Minas Gerais, and Goias will either see limited rainfall or will be mostly dry during the next week.

• Subsoil moisture in the 45% of the safrinha corn produced outside of Mato Grosso was rated marginally adequate to very short

• The lack of widespread rainfall in southern and portions of center south Brazil is leading to deteriorating crop and field conditions.

FBN’s Take On What It Means: Overall, most of the safrinha corn production areas in Brazil have relatively good crop and field conditions, despite a little moisture stress. However, crop conditions and production potentials could fall significantly in coming weeks. Both topsoil and subsoil conditions lack the moisture necessary for ongoing favorable crop development if the drier forecast verifies. This production risk will likely continue to support prices.

China Increases Wheat Feeding

• China's wheat feeding to hogs and poultry has decreased demand for soymeal and corn.

• Corn prices in China have increased nearly 35% to record levels in the past year, and are at a rare premium over wheat.

• China is expected to use up to 40 million tonnes of wheat for feed in the 2020/21 crop year.

• The increased wheat in feed rations has also cut more than 4 million tonnes of soymeal demand.

• Soymeal demand has been lagging since the Lunar New Year, and is recovering very slowly following another African swine fever outbreak.

• Crush margins in China's key oilseed processing province turned negative for the first time since March 2020.

FBN’s Take On What It Means: The pressure on soybean meal comes just as millions of tonnes of soybeans are being received from Brazil. Crushers will be under a lot of pressure as shipments increase in May and June. Much depends on whether demand can catch up in coming months as the country continues to rebuild its hog herd.

FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)

The risk of trading futures and options can be substantial and may not be suitable for all investors. Past performance is not necessarily indicative of future results.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to, persons residing in Australia and Canada.