The Buenos Aires Cereal Exchange released yesterday photos of corn and wheat crops in the southeast of the Buenos Aires province. Last year, wheat crops were flooded in the region as we reported. The Rosario Board Trade now works with a harvest of nearly 11.5 million tons of wheat this season, which is down from the 12.5 million tons expected by the USDA and Argentina’s Ministry of Agriculture. Those are photos:
Russia has now an estimated production of 63 million and worries about western sanctions and its wheat surpluses. While Brazil want to export beef and enter in the Russian market, Russians requested that Brazil lift its restrictions to wheat imports.
According to Brazilian authorities, the wheat planted in Russia does not comply with sanitary requirements, consultancy Trigo & Farinhas revealed AgroSouth News.
An estimated volume of 200,000 tons of wheat or nearly 10 percent of the surface of the cereal in the province of Buenos Aires were lost due to the rains of last weekend, according to data released by the Regional Consortium of Agricultural Experiment (CREA), an agricultural association of Argentina.
Over seven inches (180 millimeters) of rains accumulated just last Sunday in some regions of the province on average. The municipalities with losses accounted were Necochea, Lobería, Tres Arroyos, San Cayetano, Balcarce, and Coronel Dorrego. Losses on barley crops were also seen.
To make things worse, Argentina’s Ministry of Agriculture announced that the total quota of wheat exports of 1.5 million was already overcame in the country. That would mean that the chain could not export more than this. But, according to Brazilian consultancy Trigo & Farinhas, the Ministry can possibly extend the quota and allow more volumes of exports.
Mills do intend to speed up purchases in Southern Brazil because of a perspective of a good wheat crop in the region, Brazilian consultancy Trigo & Farinhas says.
In Rio Grande do Sul, on the other hand, relative humidity has brought some fungus diseases in some regions of the state, according to the Rural Institute of Technical Assistance of Rio Grande do Sul. Rains are expected for the southern state in September and October.
According to data released by Mato Grosso’s Institute of Agricultural Economics (Imea), about eight percent of an expected soybean production of 27.3 million tons in the Brazilian state. By the same month of last year, the volume sold was almost 32 percent.
Imea says that the explanation for the significant delay is the low prices. Mato Grosso is 22 days away from starting the planting season of soybean. The hallowing period ends in the next September 15th.
The cotton harvest reached 70 percent of the forecast surface in the state of Mato Grosso, according to the Mato Grosso Institute of Agricultural Economics (Imea). The total cotton area is estimated at 1.5 million acres.
The harvest advanced 15.7 percent in one week, but the pace is still delayed compared to last year. Typically, the works start by late June.
Brazil’s National Supply Company (Conab) that the state would produce 2.45 million tons. Mato Grosso accounts for 57 percent of the total cotton surface in Brazil.
A projection made by analyst Carlos Cogo puts the Brazilian corn area in the second crop as 8.6 percent smaller for the next summer crop, which starts being planted in September. The total surface in the summer would fall to 14.9 million acres.
Cogo, on the other hand, sees an increase of the second corn crop to 23.040 million acres – a 2.2 percent jump compared to 2013/2014. “This is justified because of an increase of the soybean area in the summer”, summarized the analyst. The corn area typically replaces the soybean in the winter.
The largest cooperative union in the state of Paraná, the second biggest corn producer in Brazil, Coamo, forecasts that they would plant 8.4 percent less corn in the summer. Coamo has 26,000 associates mostly in Paraná, but also in Mato Grosso do Sul and Santa Catarina.
The president of Coamo, José Aroldo Gallassini, blames the uncompetitive prices of corn for the fall. “Growers are aware of the importance of crop rotation, but if the price is so low, growers would not plant corn”, Glassini told Reuters.
Argentina has finished the planting of a total surface of 10.1 million acres of wheat, according to the Buenos Aires Cereal Exchange. Lately the weather condition in the South American country have been favorable to wheat crops, but previous precipitations have damaged some crops and more rains are forecast to be on the way.
The Buenos Aires Cereal Exchange did not release an official forecast of production, but the United States Department of Agriculture estimates that Argentina will produce 12.5 million tons of wheat in this season.
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.
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.