Datagro Agency Boosts Brazil’s Soybean Crop
- The agency sees soybean production at a record 135.6 million tonnes.
- That is up from the previous forecast at 135 million tonnes.
- Soybean planted area is estimates at 38.75 million hectares.
- Total corn production is forecast at 110 million tonnes, down from 114 million previously.
- Corn planted area is forecast at 19.6 million hectares.
FBN’s Take On What It Means: It is not a surprise that agencies are looking for a record crop from Brazil. While weather has not been ideal for the entire country this season, planted area is higher offsetting some weather concerns. With harvest just starting in som places, we still have some time for weather to impact the crop. There is little room in the balance sheets for production cuts.
Markets Slip With Soybeans the Leader
- Soybeans are leading markets to the downside thanks to timely rains noted for parts of South America.
- Showers have occurred and are in the forecast for parts of Brazil and Argentina with Argentina the one who likely would benefit the most.
- Markets are easing off multi-year highs thanks to the weather outlook.
- But, we caution producers that even a record South American soybean crop leaves little room in the global balance sheet for higher use.
- Wheat supplies will not shift in the coming three months until harvest in India is underway, but wheat continues to be tied to corn futures.
- And while soybean production outlooks are forecasting a record crop in South America, corn production is not forecast to hit a record.
FBN’s Take On What It Means: While markets are easing off recent highs, we remind producers that global stocks of the big three commodities are moving tighter. China’s demand is forecast to remain strong, and US supplies are dwindling as well. This situation is expected to keep support in the markets despite the recent weakness.
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