Mar 08, 2021

Markets Watching South American Conditions

Though soy harvest in Brazil made some progress last week, it remains behind

Brazil Crop Conditions

  • Mato Grosso safrinha corn planting is at 73% complete, up from 55% last week and behind the average of 91% (see Chart below).
  • On average, 5-10% of the second crop corn is planted in March, but this season it will be over 20%.
  • In Rio Grande Do Sul, corn harvest progress was reported at 55%, up from 48% last week and ahead of 47% average.
  • Mato Grosso’s soybean harvest is 67.2% complete, up from 52.1% last week and remains behind the average at 80.3%.
  • Last year at this time, Mato Grosso’s soy harvest was nearing completion at 91.5% done.
  • RGDS bean crop progress remains behind with no harvest progress reported, compared to 5% complete last year and an average pace of 3% complete.
  • The bean crop is 15% mature versus 24% last year and 16% average and 56% is pod filling compared to 67% average.

FBN’s Take On What It Means: Though soy harvest made some progress last week, it remains behind and has delayed safrinha corn planting in Mato Grosso. This leaves a large portion of the second crop at risk to the start of the dry season in late April. In southern Brazil, the report mentioned underwhelming soybean yields due to drought. The crop there needs finishing rains to keep production outlooks steady. Less than ideal conditions that are too wet in some areas and too dry in others could lead to further world supply tightness and continue to support prices.


Strategie Grains Updates EU Oilseed Outlook

  • The agency cut rapeseed ending stocks to 1.1 million tonnes, down 800,000 tonnes versus last year.
  • The cut primarily was tied to a 300,000 tonne increase in crush volumes.
  • Rapeseed imports were lowered marginally but at 6.5 million tonnes, still would be in line with a record volume.
  • Front-month futures hit an all time high Monday thanks to the tight supply situation that is far from easing.
  • The agency updated its forecast for this year’s harvest to 17.05 million tonnes, which is 90,000 tonnes lower than the previous forecast.
  • That harvest would still be above last year’s harvest by around 800,000 tonnes but is far from being large enough to offset the tight stocks situation the EU is facing.
  • The numbers above represent the EU-27 + the UK.

FBN’s Take On What It Means: The tight situation for the EU is also a feature in other world veg oil markets, lending strength to the Chinese, Malaysian and Canadian markets as well with European rapeseed futures hitting all time highs. New-crop supplies are months away and acreage is not high enough to build stocks for the bloc. We expect bean oil futures to remain supported for now and that new-crop values could gain also.

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.

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Kevin McNew

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Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014