The country of Uruguay has released its new official grain stock numbers. The South American country has 1.4 million metric tons of soybeans, 123,157 tons of corn and 305,140 tons of wheat. The majority of the soybean stocks are located in the region of Colonia, while there is more corn in Rio Negro. The data is from the Ministry of Livestock, Agriculture and Fishery.
Category Archives: Uruguay
Most analysts agree that in an eventual protectionist wave of the next president of the United States, Donald Trump, China could react by putting import taxes on U.S. grain or just not buying so much U.S. corning, seeking another suppliers such as Brazil, Paraguay and Argentina. Dave Holloway, a trader from the state of Michigan, it could be a problem for the United States if Trump confirms this policy. As candidate, he mentioned a possibility of 35 percent tariff on Chinese products, which was later denied.
“If Trump puts in practice this fight, the prices would increase and three countries [China, Japan and Mexico] would go to Brazil. We are not the only store in town. The Chinese would be happy to help the Brazilian infrastructure,” affirmed Holloway.
For Darin Fessler, a broker from Lincoln, Nebraska, says that “only time will tell about the ability of Trump to negotiate with China or Japan. I think there could be some good changes made to the manufacturing sector and currency side of things,” Fessler told AgroSouth News.
Corroborating with these opinions, Brazilian market analyst Antonio Sartori from BrasilAgro says that is more likely that Trump goes with complaints to the World Trade Organization against China, but that could suffer retaliation too. “China has spent US$ 100 billion with subsidies for corn, wheat and rice growers and this is out of the rules, “concludes Sartori.
The wheat production in the Mercosur countries (Brazil, Uruguay, Paraguay, and Uruguay) may be three million metric tons lower than previously expected, according to a forecast of the Brazilian consultancy Trigo & Farinhas. The total output in that market would now be 18.7 million metric tons.
“For a while, in my judgement, there will be no need to increase the imports [from outside the bloc], because it just reached that Argentina would put in the market. But, as we have two more months of harvest ahead with bad weather forecasts, the volume of deteriorated wheat can worsen,” affirmed Luiz Carlos Pacheco, director of Trigo & Farinhas.
Nearly two million metric tons would be reduced of the previous estimate of Argentina because of floods considering the estimate of the Buenos Aires Cereal Exchange in its weekly report of October 27th and over 250,000 tons of less output in the Brazilian state of Rio Grande do Sul due to frost and hail recently.
Though a minimum volume, it is the first time in history that Argentina will import wheat. Uruguayan company Granosur announced yesterday that will export to Argentina 300 tons of wheat from Paysandu. This export happens because of a lack of quality of the Argentine production this season. Some experts say that these imports are a “test” that could happen in increased volumes from Uruguay.
As a result of the floods in part of South America, there are estimates that say that Uruguayan soybean growers are likely to lose nearly 500,000 tons. With soybeans priced at US$ 350 per ton, the financial losses might be approximately US$ 175 million. The previous expected volume to be harvested in the tiny country was 2.8 million metric tons. If there are more delays, the losses can be even bigger.
The market already speculates with a possible lost of the strength of the El Niño phenomenon at the first semester of 2016 and, therefore, the coming of La Niña. The forecast is based on data from the Bureau of Meteorology of Australia and the meteorology services of Japan that puts the peak of El Niño during the first semester of next year. An anticipation of La Niña would result in drier weather in both South America and North America. The market reacted with rallies on the prices of palm oil, sugar and dairy products last week. Some consultancies asked by AgroSouth News have put greater risk in the future for the prices of corn, soybeans, wheat, cotton, and coffee.
The wheat output from the countries belonging to the Mercosur bloc may shrink this year because of excess rains in most of the top producing regions. A new projection of consultancy Trigo & Farinhas estimates the total production of the bloc in 18 million metric tons and just eight million metric tons with enough quality to produce bread. Comparing to last year, the wheat used in that same level was 18.5 million metric tons. According to the consultancy, the lower supply, especially going to Brazil, is mostly due to a crop with 800,000 tons less in the state of Paraná and also smaller output in Paraguay.
If those numbers are confirmed, Luiz Pacheco, director of Trigo & Farinhas, says that Brazil will need 5.8 million tons coming from countries outside the bloc. “In my opinion it will come mostly from the U.S. and Canada, but some people say that a part could come from Germany,” forecasts Pacheco. The total Brazilian demand might fall from the 11.1 million metric registered in 2014 tons because of the current recession faced by the country.
By Luís Vieira
SHANGHAI AND BEIJING, China (Agriculture.com) – The Chinese grain stocks, purchase intentions, and production estimates are always an issue of concern and curiosity for the followers of the markets. However, when one goes to China it is relatively easy to find the reasons and the data that some folks may be eager to know in the U.S., South America and around the world.
Perhaps because of China’s censorship and cultural differences compared to western democracies, when the country does make public its numbers and does not explain the reasons for its decisions, the guessing game starts to play out.
In general, a lot of people do not feel very comfortable in China talking about of food and some asked not to be identified. Feeding 1.3 billion persons is one of the major concerns of its central government and keep food security a top priority. But in communism or other closed regimes, it will depend on the persons you talk to.
A monthly report authored by Luiz Pacheco, director of consultancy Trigo & Farinhas, says that the total wheat production in the four countries of Mercosur (Brazil, Uruguay, Argentina, and Paraguay) will shrink 2.81 percent to 20.3 million tons. The surface in the region would decline 8.16 percent to 18.7 million acres.
The only country in the bloc that would not diminish its output will be Brazil with an increase of 4.70 percent to 7.1 million tons. Luiz Pacheco explains that the traditional wheat producing states in the country, such as Paraná and Rio Grande do Sul, diminshed the surface dedicated to winter cereal, while other states increased the area.
“In the states of Goiás, Mato Grosso and within the Federal District, we have detected an average (area) increase of 10 percent mostly because of demand. In Minas Gerais, there is a 22.47 percent increase compared to the previous season. In the south, the weather is riskier,” forecasts Pacheco.
In Paraguay, the major decline of production will be seen with a 15.93 percent fall to 1.2 million tons. In Argentina, the top producing wheat country in the Mercosur, production will shrink is likely to decrease 5.77 percent to 11.070 million tons, while the surface will have a decline of 6.82 percent to 10.1 million acres.
Luiz Pacheco says that in the next season imports from outside of Mercosur bloc, generally coming from U.S. and Canada, will get to zero. “The final stocks may reach 651,560 tons; an increase of 27.15 percent. Brazil may absorb surpluses from Uruguay and Paraguay. Therefore, big volumes will be available within the bloc at a lower price than U.S. or Canada wheat,” analyzed.
Argentina has currently a stock of nearly 3.2 million tons of wheat that at the moment cannot be exported because of a government ban, but this volume is likely to be released in December, when a new government may take power in the country.
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.