The Agricultural Commission of the Brazilian House of Representatives approved a bill which prioritizes purchases of domestic wheat on government contracts. The project alters a law that regulates the sales of the cereal in the country.
The author of the new proposal, representative Luiz Nishimori, believes that the measure would be important to stimulate the sector. In his evaluation, one of the causes of the Brazilian dependency on imported wheat is “the unfair competition of other countries which receive volume of subsidies for production and exports”.
On the other hand, he highlights that is not possible to grant subsidies to Brazilian farmers in tough economic times of the country. “Most of these purchases may occur to form public stocks of wheat,” says the representative.
The second corn crop in Brazil will have a total output of 55.7 million tons this season. That would be a growth of 23.2 percent and a new record. The record production is being pushed by the favorable weather, according to the forecast of consultancy Safras & Mercado. The previous estimate had put the corn output of the country at 52 million tons.
In the state of Mato Grosso, harvest already started with 12.8 percent of the surface, data from the Mato Grosso Institute of Agricultural Economics says. In that state alone, production would be 19.8 million tons. In Paraná, the second largest producer, there may be a record of 12.4 million tons.
The Buenos Aires Cereal Exchange has updated its projection for corn production in the first crop, but its forecast for output remained at 25 million tons. The harvest in the country reached 43.1 percent of the surface and advanced 2.5 points in one week.
There is a delay of harvest comparing of 1.3 percent compared to the same period of last year, but the arrival of frosts in the producing regions would reduce grain humidity and speed harvest in late zones. The Cereal Exchange also forecasts that the yields will be higher than average.
Union leaders of the Rosario area, main export port region of Argentina, reached a deal with employers even before the scheduled time that the strike to begin. The strike was forecast to start by the early hours of Tuesday, but port companies offered a wage hike of 31.5 percent that ended the manifestation. With the proposal, the Central General of Work decided to cease the strike.
In May, the surrounding areas of Rosario established a strike that lasted for nearly a month, affecting the operations of Bunge, Louis Dreyfus and Cargill. The market reacted with fear after the announcement with undetermined duration and acted quickly to end it.
Archer Daniels Midland has confirmed that it will invest nearly US$ 2.4 billion in a new protein facility in Campo Grande, Mato Grosso do Sul. ADM’S Chief Executive, Juan Lucian, announced the investment last week during an event with Brazil’s president Dilma Roussef.
The purpose of the new factory is to produce functional proteins to complement its U.S.-based production. Another US$ 7o million of investments were announced for ADM’s terminal in the port of Santos, São Paulo. A new concession was granted to the company to manage the terminal for more 20 years.
A new shiploader will be installed at the terminal. Through the adoption of closed transportation mats, the company seeks to reduce the emission of vegetable particulates at the operations.
In August of 2014, ADM started operations at Barcarena port, in the state of Pará, where they invested US$ 200 million. The operations capacity would increase from 1.5 million tons to six million tons. The terminal is operation through joint venture with Glencore.
A strike in the major ports of Argentina may stop the grain trade starting at the first hour of midnight. Worker unions aim to paralyze all agricultural exports in the country, the General Confederation of Work announced.
The strike will start in Rosario, where nearly 80 percent of the grain exports pass. The workers seek wages increases and more bargaining rights.
The corn harvest has resumed in some regions of Brazil’s second producing state, Paraná. In Palotina, in the western part of the state, precipitation accumulated 1.18 inches in the last few days, but the work tend to continue soon.
In the meantime, the top producing state, Mato Grosso, already harvested 4.73 percent of a total second crop surface of 7.9 million acres, according to data from the Mato Institute of Agricultural Economics (Imea). The is a delay of just 0.46 percent compared to previous years in that state.
The president of the Association of Corn and Soybean Growers of Mato Grosso, Ricardo Tomczyk, said in an interview to Globo Rural that the soybean farmers will demand more credit loans this year.
“The sales of inputs will be delayed and there will be stress at the end of the month. There could be a default, not widespread, but is natural that it occurs,” affirmed Tomczyk.
He also says that profit margins of soybean growers tend to reduce and yet there will be a downward pressure. “Farmers will await for the best opportunities (to sell), but it is important to watch close. Even at moments of downward pressure, there are peaks and rallies, so farmer should be vigilant to take advantage of this,” explained.
According to the Mato Grosso Institute of Agricultural Economics, the 2014/2015 crop sales reached 78.9 percent of the total volume.
The Buenos Aires Cereal Exchange estimated last week that the corn production in Argentina may reach 25 million tons as harvest advanced to 40.7 percent of the surface. The works are 1.3 points advanced compared to last year. The weather forecast says that frosts and cold fronts may touch key producing areas finish harvest of the cereal.
By Luís Vieira
The downward pressure on corn can deepen over the next months considering the projections coming out of Brazil. Brazil’s National Supply Company released its report this Thursday (June 11); it forecasts a record production of 49.8 million tons for the second crop and a total of 80.2 million tons in the year. A month ago, the projection was 78.2 million tons. The projection was increased for the fourth time in a row.
For Eledon Oliveira, crop estimates manager at Conab, the output projections for the cereal have increased substantially because of good weather in top-producing states such as Mato Grosso and Paraná.
“There was a delay in planting in both states. But later there was above-average rain for two months. This has pushed the yields up,” Oliveira told Agriculture.com.