Brazil Dryness Continues
Some rain fell from Paraguay to Mato Grosso and southern Brazil over the weekend while most other areas had little significant precipitation.
Second season corn in portions of Parana and Sao Paulo may see rising levels of crop stress as the soil moisture declines.
Corn in Mato Grosso, Mato Grosso do Sul, and Goias should have enough soil moisture for a while longer, but will need greater rain soon.
The forecast for much of Brazil and Paraguay through May 2 has some showers in the north that will not be enough to prevent drying.
High temperatures through the next week will be normal to above normal from Mato Grosso do Sul and some nearby areas to northeastern Brazil.
Timely Rain should increase in Paraguay and southern into central and western Brazil May 3-5, but confidence for this event is low.
FBN’s Take On What It Means: Safrinha corn remains the largest concern in Brazil. Showers are expected infrequently and it still looks like the monsoon season will end before the end of April. The potential rainfall is forecast to be light and somewhat poorly distributed. The likely increase in crop stress is leading to some analysts reducing production forecasts and is supporting this new leg higher for US ag prices.
Argentina Considering Export Tax Increase
Unsurprising to many, the Argentine government is considering raising its export taxes with corn, wheat, and soybeans/products likely targets.
Already, the exporter has a 33% tax on soybean exports, 31% on meal and oil, and a 12% export tax on wheat and corn.
Argentina is the world’s top soybean meal exporter and a key exporter of corn and wheat.
Already, producers hold onto grain despite high prices as they use grains as a hedge against inflation.
The government probably is looking for ways to raise revenues but also to keep domestic prices from further rising.
Argentina is dealing with notable inflation and weakening currency.
FBN’s Take On What It Means: An export tax for a major grain origin is a plus for other exporters and prices in general and a negative for importers and Argentine farmers. The move would not be a big surprise given the political party that is in charge.
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