Brazil’s Soybean Plantings Wrapping Up
- The major exporter has sown an estimated 95% of its intended soybean acreage.
- That is versus 96% sown last year and was up five points on the week.
- Agrural reports that its current production forecast is at 132 million tonnes.
- But, the agency also notes that estimates could be revised this month as the ongoing drought could impact production totals.
- Weather analysis indicates that Mato Grosso daily rainfall since September 16 until December 15 could be the driest in more than 40 years.
- The other top-producing states, Parana and Goias, are slated to have had a top-three driest period from September 16-December 15 in more than 40 years.
FBN’s Take On What It Means: Brazil’s planting season got off to a shaky start but has recovered with soybean planting pace now in line with normal. But, the country remains dry overall. Recent rains have been noted, but more moisture is needed. We still look for upside potential for soybean futures.
Russia Schedules Wheat Export Tax
- Russia’s economy ministry has submitted a wheat export tax proposal.
- That tax proposal is set at 25 euros per tonne, starting February 15 or 2,000 rubles per tonne in addition to the grain export quota at 17.5 million tonnes, which also starts February 15.
- SovEcon looks for the move to reduce Russian wheat exports by 2-3 million tonnes with domestic feed use likely to rise.
- Sunflower oil and sugar also could see a cap on domestic prices.
- Russia is facing rising food costs across the board and the government is looking for policies to offset the rise.
- Domestic incomes have fallen sharply thanks to COVID while food prices have risen over the same period.
FBN’s Take On What It Means: A lack of wheat supplies is not the cause of the rising prices in Russia; the export tax (or smaller limit on exports) will directly benefit other exporters and keep support in the futures market in the near term. Russian wheat prices are sharply lower on the news as they price themselves back into the export market while US futures have edged lower overnight.
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