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Grain Prices Slightly Firmer Ahead of USDA Reports

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PIXABAY
PIXABAY

Brazil’s 2020/21 Crops Trimmed Further

  • CONAB released its September production forecasts and reported the corn crop at 85.7 million tonnes, down from 86.6 million in August.

  • The largest reduction was in Mato Grosso, which was down 300,000 tonnes, with small declines in other states.

  • Mato Grosso’s state agency (IMEA) recently increased its production estimate to 32.6 million tonnes from 32.0 million last month.

  • Parana crop estimates have stabilized near 6-6.5 million tonnes, slightly above DERAL’s last forecast at 5.95 million.

  • The 2020/21 bean crop projection was lowered slightly to 135.9 million tonnes from 136 million previously, 11.1 mmt larger than last year.

  • USDA’s August report projected the crop at 137 million tonnes, and an updated forecast will be released in today’s WASDE.

  • CONAB’s first outlook for the 2021/22 season won’t be released until next month.

FBN’s Take On What It Means: Brazil’s ample bean crop has been the largest supplier to China, but US bean sales for new crop have started to pick up seasonally. The smaller Brazilian corn crop has led to larger US sales year over year. At FBN we believe the lower corn crop will likely continue to support larger US exports into harvest.

FBN
FBN

Argentina Grains Exchange Updates Production Outlook

  • The Buenos Aires grains exchange sees farmers there changing slightly from soybeans to corn for the upcoming harvest season.

  • The soy crop is seen at 48.4 million tonnes, which is down only slightly from the previous place holder but leans towards the same direction as FBN and for the same reasons - likely higher corn plantings versus beans.

  • Bean planted area is seen at 16.2 million hectares, off 200,000 from the previous forecast; plantings will start in about a month.

  • The corn crop is seen between 65-66 million tonnes with corn planted area boosted 100,000 hectares to 6.9 million.

  • Rains are expected in the next week which is a plus given the dryness that has been a feature there for months.

  • Wheat conditions improved in the latest week on recent rainfall with the exchange seeing that crop at 20.5 million tonnes, up from the previous forecast at 20.1 million.

FBN’s Take On What It Means: While the switch from beans to corn is not large, it is a small plus for the bean market. Right now, with the crops not in the ground, a lot of weather risk lies ahead. Recent rains are a big plus there but the threat of La Nina still is present. The wheat crop received much needed rains, but harvest is a couple of months out with more rains needed.


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