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Ag Markets Firm While Waiting for New USDA Data Today

South American corn production seen steady

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South American Corn Production Seen Steady

  • Buenos Aires Grain Exchange (BAGE) reported Argentine corn harvest progress at 26% complete vs 22% last week.
  • Corn crop conditions improved to 33% good /excellent vs 32% last week.
  • The BAGE production forecast was unchanged at 50 million tonnes.
  • Conab sees Brazil corn production at 102 million tonnes, up 2 million from last month.
  • The average estimate for today’s report expects the USDA will leave production nearly steady at 100.4 million tonnes for Brazil and 49.7 million for Argentina.

FBN’s Take On What It Means: The weather for the northern half of the second crop corn has generally been good. In contrast, the weather in the southern half of Brazil’s safrinha corn has been dryer than normal. But, the bulk of safrinha corn production is in the northern areas of the country. The dry situation is not yet serious enough to begin trimming production forecasts for second-season corn but should be watched.

Soybean Crop Estimates Trimmed in Brazil

  • Rio Grande do Sul was hit hard by drought and hot temperatures during pod filling as March ended up being the driest month of the summer.
  • While not the largest soybean-producing state, it is in the top four.
  • At the start of the growing season, it was estimated that the state would produce approximately 19.5 million tons of soybeans, but many recent estimates have the production in the range of 9 to 10 million tons.
  • Conab estimates that total Brazilian soybean production will be 122 million tonnes vs 124 million last month.
  • The latest USDA estimate will be released later this morning, and is expected to come in at 123.7 million tonnes vs 126 million last month.

FBN’s Take On What It Means: With the lower estimate for the Brazilian soybean crop, the 2019/20 crop is still bigger than last year’s production of 117 million tonnes, and is on par with the previous record of 122 million tonnes in 2017/18. Ample supplies from Brazil will continue to weigh on world prices.

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

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