Record Soybean Harvest Underway In Brazil.

Jan 14, 2014

The size of the large soybean crop being harvest was increased, with officials upgrading their forecast to a record 90.3m tonnes, and the farm minister saying that a far higher result could "easily" be achieved. Conab, the official crop bureau, raised by 300,000 tonnes to 90.3m tonnes its forecast for Brazil's newly-started 2013-14 soybean harvest. Production at that level would see Brazil overtake the US as the biggest producer.

Sensitive time

And Antonio Andrade, the Brazilian agriculture minister, said that the South American country - which harvested 81.5m tonnes of soybeans last year according to Conab "The harvest could "easily" top 95m tonnes, he told reporters.

Brazil's harvest is increasingly under the microscope, given its huge potential, and the prospect – logistics allowing – for the country to dominate export markets for now, prompting cancellations even of orders of US supplies already made. The market now appears to be looking forward to the movement of new-crop South American, particularly Brazilian, supplies beginning this month and is also concerned with the possibility of cancellations of soybeans on the US books to China.

Corn vs soybeans

Conab attributed its upgrade to a slightly higher estimate for sowings, seen at 29.6m hectares, up 100,000 hectares on the previous estimate, and by 1.8m hectares year on year. Farmers have been "encouraged by the fact that the crop in recent seasons has presented remunerative prices at the time of marketing", switching to the oilseed from the likes of corn.

Video: Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?

Historically, the USDA December crop report is a non-event or another dud report as the USDA reserves any final supply changes to the final report in January of the following year in this case 2026. But after the longest U.S. government shutdown in history at 43 days and no October crop report will they provide more data/surprise and make an exception?
Our China U.S. soybean purchase tracker is now at 26.6% or a total of 3.2 mmt but for traders it’s taking too long to unfold.
The final Stats Canada production report was bearish canola and wheat projection a record crop in both (it adds to the global glut of supplies) and bullish local corn and soybean prices in Ontario/Quebec thanks to a drought. It will not help the fund flow short-term, the USDA may need to offset it?
A U.S. Fed interest rate cut of another 25-basis point next Wednesday (probability 87.1%) could help fund flow and sentiment in stock and ag commodities into year end.
More inflows into Bitcoin this past week saw prices rebound back above 90,000 with support at 82,000 and resistance at 96,000.
A V-shaped bottom in cattle suggest the lows are in after Mexico reported another new world screwworm case. Lower weights, seasonal demand and higher U.S. beef select/choice values with a continued closure of the Mexican border to cattle will result in a resumption of higher cattle futures into yearend.
Australia is expected to produce its 3rd largest wheat crop ever at 36 mmt adding to the global glut of supplies.
Reports of ASF in hogs in Spain the largest pork exporter in Europe could see the U.S. win more pork export business long-term.
If the rains verify into next week of 3-5 inches for Brazil it would go a long way to fixing the dry regions from the last 2-months, but the European weather model has been wrong for the past 2-months!
Natural gas futures are surging to the 3rd price count as frigid hold temps set in.
CDN $ is also surging to end the week on a very resilient economy and better employment numbers suggesting no interest rate cuts next week.
Finally, the CFTC report showed funds were net buyers of soybeans but sellers of corn, canola and wheat. In real time the funds have gone back to selling as they take some profits.