According to a report from the Rural Institute of Technical Assistance of Rio Grande do Sul, there is a delay of wheat planting due to low moisture in the state. As of last week, planting reached just three percent of the expected surface. Experts say, however, that the delay can be recovered in the coming days.
Most farmers are now afraid of increasing areas. The total surface may fall 20 percent compared to last year and it is estimated at 2.3 million acres. A study of Trigo & Farinhas consultancy points out that prices increased 1.24 percent last week. The value at this level could bring profits to 36.31 percent, but yet farmers have not shown a will to change their minds.
Agroconsult increased yesterday its projections for corn production in Brazil to a record of 51.4 million tons. The reason for the adjustment was the “excellent” development of the crops in all regions of the country and significant volumes of rain in May.
The total output, accounting both the summer and winter crops, would be 82.1 million tons. The report reveals that even in areas that late planting took place in Mato Grosso, the crop has developed well, while the weather forecast for Paraná is that there would not be frosts during this winter in corn producing locations.
Paraná’s Department of Agriculture released its report yesterday and it has revealed that the wheat planting progress reached 51 percent of the surface in that Brazilian state. The total surface for the winter cereal is estimated at 3.3 million acres. Conditions are considered good in 98% of the crops currently.
According to consultancy Trigo & Farinhas, mills in the states of Rio Grande do Sul and Paraná will be supplied until June. The domestic wheat faces abundant competition from Uruguayan and Paraguayan wheat.
Argentina’s top grain export hub, the Rosario port, had the traffic of corn and soybeans interrupted by a stranded vessel. The ship, called Nord Hydra, has blocked 48 other boats at the main canal of the Paraná river. Other grain boats have diverted from that route.
The Brazilian corn production is expected to reach 79.8 million tons this year considering the two (summer and winter) crops. Based on that assumption, Carlos Cogo, a Brazilian market analyst, says that Brazil’s final stocks of the cereal will be 16.7 million tons – if confirmed, that would be a new record.
Cogo also forecasts that the Brazilian corn output during the summer crop of next crop will shrink 5.2 percent to 29.1 million tons and the two crops summing 77.27 million tons. “The trend for the domestic market is that the downward pressure continues with a projection of a great harvest, slowness at the ports and high stocks in several producing regions,” summarizes Cogo.
Carlos Cogo, a Porto Alegre-based consultant, revealed his estimates for the total soybean output in South America at 2014/2015 crop season. According to Cogo’s forecast, the total production in the region would be 168.8 million tons. Brazil would account for 95.4 million tons of the oilseed, followed by Argentina with 58.5 million tons, Paraguay with 8.5 million tons, and Uruguay 3.6 million tons. Bolivia would repeat the output of 2013/2014 with 2.7 million tons.
An early projection of Cogo for the next crop season (2015/2016) indicates a slight growth of 0.8 percent to 170.1 million tons in the region. As a result of that output and the Chinese demand for the grains, South American share of the global production would jump from 53.2 percent currently to 53.6 percent. The analyst says that total imports from China will grow 5.4 percent to a record of 77.5 million tons – in 2014/2015 was 73.5 million tons.
Argentina’s Federation of the soybean oil industries workers has gone into a strike that affects 40 facilities of the industry – all in the port city of Rosario. The workers demand an increase of at least 42 percent in their wages. Employers, so far, just offer 27 percent of increase. Government officials try to convince the unions to lift the strike for 60 days while no agreements is reached. The local unions claim for those wage hikes since April 1.
Steve Cachia, Agri-commodities Consultant at Cerealpar in Curitiba, revealed that the USDA report brought no surprises, confirming the expectation of abundant supply at the international level for corn and soybeans – including for 2016.
Cachia says that two main factors will influence the market in the coming months: demand and climate. “Therefore, contracts of the new crop will gain some support until the American crop is defined due to yet aggressive demand for U.S. beans. The contracts of the new crop will depend on numerous weather forecasts until August. When there is rain, [the price] drops, when there are no drops, there is a speculative reaction,” explained.
Brazil’s National Supply Company (Conab) report yesterday projected a wheat production of 7 million tons in the country, while the United States Department of Agriculture forecasts a production of 6.5 million tons.
According to Luiz Pacheco, director of consultancy Trigo & Farinhas, the reports reduced in half the rumors about wheat production shrink in the country. He evaluates that the production level projected, higher than last year, was pushed by an increase 24.6 percent of yields generated by two factors: “There is better technology employed by producers and good weather conditions. These estimates of higher yields will reduce costs. […] There can be change in the coming reports yet,” summarized Pacheco.
Brazil’s National Supply Company (Conab) has increased its estimates for the country’s soybean crop at the report announced today. The projection for the Brazilian soybean production is 95.08 million tons – up from 94.28 million tons last month.
According to Conab, the weather has helped significantly at the final stretch of the harvest. The yields compared to last year had an increase of 10.4 percent to 3.01 tons per hectare.