Consultancy forecasts 3.5% increase of soybean area in Brazil

Carlos Cogo, a consultancy based in Porto Alegre, Rio Grande do Sul, forecasts that Brazil will increase its soybean area for the 2014/2015 season. His prediction is that the surface for the oilseed would jump 3.5 percent to 7.7 million acres.

According to Cogo, the continued expansion of soybeans in the country is justified because it is the best alternative of “profitability” when compared to other summer crops such as corn and cotton. “Farmers are not likely to change their plans for the 2014/2015 crop because a big part of the inputs were already purchased”, explained the analyst.

Data realeased by Cogo says that 95 percent of the fertilizers and seeds were purchased in Mato Grosso and 90 percent in the case of the southern state of Paraná.

Analyst forecasts “firm” corn prices in Brazil

Rafael Ribeiro, an analyst at Scot Consultoria, a Brazilian consultancy, sees that falls on the domestic prices of corn in the country could happen as the the harvest of the second corn crop advances, but he thinks the most likely scenario is different.

“The most likely scenario is of firm prices, accounting the auctions forecasts for the second semester [in the country]“, predicts Ribeiro.

Argentina’s government prohibits beef exports for 15 days

The government of Argentina announced today that the exports of beef will be restricted or banned in the next 15 days. The government has taken the measure because the meat inflation reached 15 percent in just two weeks. Argentina officials fear that prices could go even higher.

“It is not a total prohibition, but we will make the ban for the next 15 days in order to lower the price of meat”, announced the Interior Trade undersecretary, Ariel Langer.

Frost affects 12% of wheat area in Paraguay

Widespread frosts occurred last week in Paraguay and affected nearly 12 percent of the 1.7 million acres of wheat surface. The most affected regions were the departments of Alto Paraná, Itapuá, and Cazaapá.

The harvest already started in the country, but just in the departments of Caaguazú and Canindeyú, and only reached less than one percent of the total area. Throughout the week, precipitations summed 0.7 inches (11 millimeters) and 45.1 inches (1,146 millimeters) in the month.

Argentina Farmers Struggle to Finance Crops After Default

By Luís Vieira

After Argentina failed to reach an agreement with 7% of the U.S. creditors that did not accept a debt restructure plan introduced in 2005, New York arbitration judge Thomas Griesa ordered that the country pay the total of US$ 1.3 billion to all creditors in the case. The South American country did not accept the order because it could bring a precedent for new claims from the other 93% creditors, and that could lift the total debt up to US$ 17 billion. Therefore, since July 31 the country went into a technical default – the second default in 13 years.

As a result, Standard & Poor’s downgraded Argentina from CCC- to SD (stands for Selective Default). This means that the country will have even less access to international markets. And what this would mean for grain farmers?

In an environment of an annual inflation of 30% to 40% and a government entering a default, interest rates are likely to go up, and farmers tend to have difficulties financing the next crop, according to most experts.

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Brazil: corn exports speed up in August

Corn exports from Brazil had a volume of 1.37 million tons in August until the third week, says the foreign trade authority in the country. In July, the South American giant had just exported 592,000 tons of the cereal.

The average number of shipments in the month is on 124,500 per day, which is below the average for the same period of last year. From February until July, Brazil exported 4.3 million tons of corn.

Rotation crops jump 259% of surface in Mato Grosso, Brazil

The second crops planted in the Brazilian state of Mato Grosso for rotation purposes had its area increased in 259 percent in this season. All together, the production of rice, sunflower, black beans, and sorghum occupied 1.89 million acres in 2013/2014, says a survey from Brazil’s National Supply Company (Conab).

The most significant increase was the sunflower surface with 149 percent more acres than last year. All the grains summed had a volume of 1.5 million tons – up from 1.3 million tons in 2012/2013.

Nearly 50 districts flooded in Argentina

Nearly 15 districts of the Buenos Aires province in Argentina had state of emergency declared this week. The region was flooded by the precipitations of the last few weeks. Agricultural associations in the country, such as the the Rural Society, the Agrarian Federation, and Coniagro have claimed for extension of payment deadlines and tax exemptions because of these weather patterns.

After a season with severe drought, precipitations in six months surpassed 39.35 inches (nearly 1,000 mileometers) in the region. That generated losses mostly on areas of the second corn crop.

Brazil: external tariff on US wheat is reestablished

Since last Friday, the external tariff applied on wheat imported from outside of the Mercosur bloc in Brazil started to be enforced again. The 10 percent tariff rate was exempted since June because of a lack of domestic supply.

Brazilian consultancy Trigo & Farinhas still works with a forecast of a volume of one million tons of imports from the United States in 2014, which is where most of the wheat outside of the Mercosur comes from.

Corn price support will increase in Brazil, guarantees minister

Brazilian minister of Agriculture, Neri Geller, promised on Saturday that the minimum corn price, the official reference for the price support policy, might increase soon. He did not specify the new minimum price because the value is being studied by the ministry. Currently, Brazil’s National Supply Company put the minimum price at around R$ 14.50 (US$ 6.41, as of today) per bag of 60kg.

The new policy should be implemented until January of 2015. The Association of Corn and Soybean Growers suggest a minimum price of R$ 17.64 per bag based on the current costs.