The occurrence of frosts and most recently rains in southern Brazil are likely to generate wheat losses. Fungus and other diseases also occurred mostly in Rio Grande do Sul, the second largest producer in the country. There is not an official estimate of the losses, but some independent sources talk about the possibility of 50 percent less production in the Northwest of the state. Another relevant factor is that these weather patterns can generate a major delay of planting of summer crops.
Currently, the USDA puts the Brazilian wheat production at 6.5 million tons, while Brazil’s National Supply Company predicts 7.6 million tons. “These volumes of production can be confirmed, but a smaller volume of bread wheat will be produced. But still everything is indefinite,” explained Luiz Pacheco of Trigo & Farinhas consultancy.
The soybean planting works have stopped in the Brazilian state of Mato Grosso due to the lack of rains in the last few days. The information was gave by Ricardo Tomczyk, president of the Association of Corn and Soybean Growers of Mato Grosso, during a press conference yesterday.
“Planting is delayed and certainly that will mean a fall in productivity, wrong windows of planting and more incidence of diseases”, said Tomczyk. He added that these factors could bring down the forecast of a 27 million tons crop in the state. “These numbers will be revised due to this delay”, affirmed.
Another preoccupation is the possible delay that it can cause later to the planting of the second corn crop and cotton. “Producers will have to work faster and better”, concluded Tomczyk.
The Center of Cereal Exporters and the Chamber of Oil Industry of the Argentina Republic announced that last week the sales of grains in the country reached US$ 386 million. The exporters, on the other hand, did not reveal the specifics of the transactions. In other words, how much was sold in soybeans, corn or wheat.
So far in the year, sales accounted US$ 19.2 billion in Argentina. At the Rosario Board of Trade, the price of soybeans is US$ 269 per ton. Just yesterday, 100,000 tons of soy were traded at the board.
According to a forecast of the Brazilian consultancy Trigo & Farinhas, Brazil will need in order to consume for its food necessities nearly 5.76 million tons of wheat in 2015. Luiz Pacheco, owner of the consultancy, explains that 1.5 million tons would be offered from the state of Paraná and approximately 3.5 million tons would come from Argentina. “There still will be about 1 million tons of American wheat to be imported to mills in the Northeast and North of Brazil”, wrote Pacheco.
Trigo & Farinhas brought a slightly different approach of what was said previously by the Brazilian Association of Wheat Industries. According to the association, there is a perspective that the country would not need significant supply with wheat outside of the Mercosur bloc in 2015 because of higher production in Brazil, Uruguay, Paraguay, and Argentina. From early last year until this month, Brazilian mills imported 5.5 million tons of the winter cereal.
The Buenos Aires Cereal Exchange is now forecasting a soybean surface in Argentina of 50.9 million acres – which would be a new record. Compared to 2013/2014, it would be a growth of 1.2 percent.
Planting in the South American country is likely to start in a few weeks. There is a possibility that these area is not confirmed because of the lower price of soybeans and the higher price of cattle. Therefore, the crops would be replace by the cattle in some regions of Argentina.
The secretary of Coordination of the Argentinian Agrarian Federation, Jorge Solmi, accused Argentina’s government of breaking silobags of grain producers in the country. The Kirchner administration already expressed that it dislikes the farmers speculation using silobags for the grain sales in time of need of foreign reserves.
“This is not new. They sent people to break the silobags. There is a campaign to criticize producers that they say that speculate. This, however, is a tool to conserve the harvest. The possession of silobags is now worse than the possession of marihuana in our country”, said Solmi.
The wheat harvest in the Brazilian state of Paraná reached 65 percent of the planted surface, according to the state’s Department of Agriculture. The weather was dry over the last days and benefited the works and the quality of the crops.
By Luís Vieira
When the U.S. Federal Reserve announced that it would ease its stimulus program and by sometime raise interest rates, that decision brought several changes to the general outlook of the world’s economy. The U.S. dollar, according to some analysts, tends to be stronger around the world. In the case of South America, the top America competitor at the international grain supply, currencies may devalue even more because of local issues.
Therefore, according to Bill Tierney, Chief Economist at the AgResource Company in Chicago, a weakening currency in a country like Brazil and Argentina tends to stimulate agricultural production (and exports) relative to the dis-incentive for US production and exports. “Depending on when the South American harvest begins, it is possible that some of the contracts for US soybeans (and soymeal) could get switched over to South American origins,” says Tierney.
The soybean planting in the center-western Brazilian state of Mato Grosso is delayed and just reached 8.35 percent of the expected surface, according to the Mato Grosso Institute of Agricultural Economics. Compared to last year, there is a delay of 0.7 percent and the reason is the lack of rains in the state.
If the rains in the end of month are confirmed, as forecast, the delay tends to be recovered and the soybean productivity would not be affected, says the Association of Soybean Growers of Mato Grosso.
Corn planting has reached nearly 24.5 percent of an expected surface of 7.4 million acres, according to a report released by the Buenos Aires Cereal Exchange. The report was released last week and registered a weekly advance of 12.1 percent.
Compared to last year, the planting is 10.9 percent forward. The fastest planting was pushed by regions like the south of Córdoba, center-east of Entre Ríos, North of La Pampa, and west of the Buenos Aires province, where higher humidity was seen.