Crop News
23 Mar 2017
23 Mar 2017

Soybean: The Brazilian soybean production looks to still trending higher, with a Brazilian brokerage house touting a 111 million tonne crop estimate. The USDA agriculture services believes that China  poultry production could slide to 11 million tonnes this year from 12.3  million in 2016 due to bird flue issues. This could reduce meal demand and hurt Crush margins. With the size of the Brazilian crop continuing to swell and Chinese crush margins staying in negative, the Chinese buying pace has slowed over the last two weeks. The Foreign AG service has estimated the Chinese 2017-18 soybean imports to 89.0 million tonnes and continues to see the 2016-17 soybean imports at 86.0 million tonnes. The bear camp continues to point the fact that South American production will be as much as 12 to 15 million tonnes above last year´s total. The market fundamentals appear bearish enough for one more break before the growing season. Mato Grosso and Goias states in Brazil are expected to see regular showers and thunderstorms in the next several days, forecasters said. While that may slow fieldwork, it will improve soil moisture for the second-season corn crop. Mato Grosso du sol is reported to be 91% harvested

Corn: There is talk that some Chinese corn producers will slash planted area this year by as much as 40%. A weak crude oil market along with a stronger Brazilian real provided some negative forces along with favorable weather for the entire Corn Belt with beneficial rains boosting soil moisture and warming tempratures leading into planting season. With the possibility that South America corn proudction increases near 36.5 million tonnes above last year for the upcoming harvest, the upside looks very limited until US weather is a factor. Also, the Brazilian corn production continues to be reported at record levels. Safra´s estimate was 98 million tonnes compared to the USDA recent 91.5 million tonnes.

Wheat: July wheat experienced a sweeping hook reversal thanks to updated weather forecast  looking for beneficial rains in the hard red Winter belt and large global supplies. Surgin open interest during the March break suggest that funds are building a huge net short position. The weakness in the market continues to be from weather models that show two seperate storms that should bring relieve to most of the Winter wheat belt on March 29th. Also, world wheat production is pegged at 751.1 million metric tons, up from 735.3 million last year, and stockpiles are forecast at a shade under 250 million tons, easily topping the prior year’s 240.3 million, according to the U.S. Department of Agriculture.


 

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