While in the Uruguay a good harvest is expected soy and corn, in Brazil weather conditions compromise the expectations of the harvest of this year; Meanwhile, international prices were perceived to be lower, affecting national values.
The harvest of soy of Brazil in 2023/24 it will reach 150.1 million metric tons, consulting firm AgRural said on Monday, lowering a December forecast of 159.1 million tons as the harvest in the main world supplier of the oilseed.
The consultant cited meteorological conditions adverse events as a cause of the reduction. However, as of last Thursday, 2.3% of the soybean harvest had been harvested, exceeding the 0.6% harvested in the same phase of the previous campaign, according to AgRural.
In addition to reducing production forecasts in the state of Mato Grosso, the main producer, AgRural also cut production expectations in several other states. It is mainly about Paraná, Mato Grosso do Sul, Goias, Sao Paulo and Minas Gerais, where high temperatures and irregular rains have caused crop losses.
What about corn?
As soybeans are removed from the fields, Brazilian farmers have also begun planting the second corn crop of 2023/24, which represents about 75% of national production each year. This crop is grown in the same fields as soybeans. According to AgRural, about 0.4% of Brazil’s second-crop corn has been planted so far.
At the same time, harvesting of the first 2023/24 corn crop reached 5.1% of the cultivated area in Brazil’s Central-South region, up from 3.3% the previous week and 4.5%. % a year earlier, said AgRural.
With regard to Uruguay, the latest report corresponding to the Spring Survey carried out by the Statistics Directorate of the Ministry of Livestock, Agriculture and Fisheries (DIEA-MGAP) highlights a new increase in the projected area of cornwhich would exceed 213,000 hectares, which represents the largest area for this crop since the 1970s. In the case of the soyestimates that the area will be located at 1,065,000 hectares, a surface area slightly larger than that registered the previous year.
A context crossed by falling prices
Grain prices recorded a general drop this Friday in the Chicago marketwhich led to the soy and to corn at minimum prices of two and three years ago respectively, after the publication of the world supply and demand report of the United States Department of Agriculture (USDA).
The USDA reported that stocks of corn of the country increased to their highest levels since 2018. While the value of the soy fell after traders rushed to unload their positions after the government reported larger than expected Brazilian crops, as well as higher yield and production levels in the United States for the newly harvested crop.
The global supply of cereals is becoming more abundant following shortages caused by the war in ukraineone of the main producers of corn and wheat, and unfavorable weather conditions.
In the United States, a record 2023 corn crop and lackluster export sales have contributed to rising inventories and pushed seven corn futures contracts to new lows, including the most active ones in March, May and September. The wheat futures They also fell, weighed down by those of corn and soybeans.
“The conclusion is very simple: Right now we are producing more than our demand, and that is putting pressure on the entire market,” said Karl Setzer, partner at Consus Ag Consulting to Reuters.
The contract of corn most active on the Chicago Stock Exchange (CBOT) was down 2.62% at $4.4575 a bushel at 1806 GMT. The contract of soy The most active wheat lost 2% to $12.1175 a bushel, while wheat lost 1.16% to $5.9675 a bushel.
“Going forward, we’re working with pretty heavy balance sheets, not just for corn, but also for soybeans,” said Terry Reilly, agricultural strategist at Marex Capital. “That’s going to set the tone for lower prices in 2024 relative to 2023.”
Source: Ambito
