The Monetary Policy Committee of the Brazilian Central Bank had its monthly meeting yesterday and decided to cut interest rates by 0.5 percentage points. The reference rates are now 7% a year and the lowest level in history.
The reduction was the tenth consecutive in the year, after a drastic reduction of inflation. Inflation target was 4% a year, but now the inflation rate is nearly 2.7%. Most analysts already expected the interest rates cut.
A report from consultancy Trigo & Farinhas, based in Curitiba (Brazil), denies that Brazil would import Russian wheat after yesterday’s market speculation at the Chicago Mercantile Exchange. Luiz Pacheco, the consultancy’s director and editor of the reporter, said that there are three reasons that the South American country would not bring wheat from Russia.
The first one is that imports are made by private companies, not the government, and they already allowed to do it and never done before. Second is that Russian wheat does not have quality. “Russian wheat is 10%-12% of protein, but it does not grow for consumption of pizzas or cakes”, explained Pacheco.
Finally, the third reason is that the Russian wheat is not competitive against Argentinian wheat. A FOB price listed in a Russian port by Trigo & Farinhas was US$ 192 per ton this week, while Argentinian wheat is paid US$ 176 per ton with a costly freight cost from the Black Sea to Brazilian ports.
Wheat sales from the recently harvested wheat crop in Argentina already reached 4.5 million metric tons. By comparison, in the same month of last year sales of the cereal had reached 2.5 million metric tons. Of the current volume from this crop that is already sold, nearly 3.9 million metric tons already have a price set. The average price sold is US$ 170 per metric ton. The data is from the Rosario Board of Trade.
The estimated production is slightly below the last year crop that reached a record of 17 million metric tons. In this season, the total production would reach 16.5 million metric tons, says the Rosario Board of Trade.
Several localities in the province of Córdoba, Central Argentina, have suffered this morning (10.27) with a 15-minute storm. After several months with a high level of water, strong rains affected localities in the province like Río Tercero, Embalse, Almafuerte, Berrotarán, and La Cruz. Power outages were registered in all of these locations. The precipitation level this morning reached 2.7 inches.
Argentina has already started soybean planting. In the case of corn, nearly 32.8% of the surface is already planted, according to the data from the Buenos Aires Cereal Exchange. The harvest takes place for wheat, where the nationwide surface was 2.8% harvested.
The most recent estimate from the Rosario Board of Trade says that Argentina will harvest at one million metric tons less of wheat than last year. The total volume would finish in 16 million metric tons during the 2016/2017 period. The reason for the smaller crops is the significant floods in the last few months in major producing areas. Disease would also be a key factor in the season.
By Luís Vieira
Low commodity prices are an issue that farmers will always have to face from time to time. On the other hand, there are alternatives that some farmers may consider for the purpose of rotation and to diversify risk.
The current season is definitely not the best for a lot of farmers in the Midwest, especially if you grow either wheat or corn. For Kansas analyst Mike Zuzolo, director at Global Commodity Analytics & Consulting, there has never been so much interest in replacing crops.
Read the full story at Agriculture.com
Brazil’s National Supply Company (Conab) has released a new report this Tuesday (09.12) and confirmed a record grain production of 238.7 million metric tons in the 2016/2017 season. The total output is 27.9 percent or 51 million metric tons higher than last year due to more favorable weather that generated higher yields.
The first crop finished with a total output of 30.46 million metric tons, while the second corn crop, that is about to finish harvest, is still estimated at 67.25 million metric tons. In the meantime, the total soybean production in the country was 114 million metric tons.
For wheat, there is an estimated production of 5.19 million metric tons, but there is still a lot to be harvested. For cotton, a harvest is near the end with an estimate of 1.53 million metric tons of cotton plume and 2.3 million metric tons of cotton core. In the season, 12.33 million metric tons of rice were produced.
After abundant rains over the weekend, nearly three percent of the total surface for the grain agriculture in the season, or 2.4 million acres, could not be used in the next season in Argentina, according to the Buenos Aires Cereal Exchange. Experts at the Cereal Exchange do not eliminate the possibility that more acres are cut. In just ten days, there was more rain volume than expected for the month of September in key producing provinces of Buenos Aires, Santa Fe, La Pampa, and Entre Rios.
The exports of the grain and cereals complex reached a value of US$ 12.4 billion in Argentina in the first half of the year, according to official data. The volume exported in the period reached 22 million metric tons, which a fall of 12 percent compared to 2016 when 25.3 million metric tons were shipped.
In the meantime, beef exports have risen 6.8 percent to US$ 1.3 billion. In terms of volume, there was a hike of 24 percent to 168,000 tons. The number is expected to grow a lot more in the coming months because has open its market of frozen beef for Argentina.
Wheat planting in Argentina is getting to the final stretch with nearly 98 percent of the total surface planted. There is some dry soils in regions like the Center-East of the Entre Ríos province, North of La Pampa, and West of the Buenos Aires province. Of the 13 million acres that were already planted, 74 percent of the conditions are considered good, 16 percent under normal conditions and 7 percent are excellent. The data was released by the Buenos Aires Cereal Exchange on Thursday (08.10).