Consultant raises Brazilian bean crop peg... Pro Farmer Consultant Dr. Michael Cordonnier has raised his estimate of Brazil's soybean crop by 500,000 MT to 86.5 MMT, and says there is potential for it to move another 1 MMT higher, depending on the outcome of the safrinha soybean crop.
"One of the big unanswered questions now in Brazil is the potential size of the safrinha soybean crop. Unfortunately, we still do not have an official estimate from Conab, but IBGE has estimated that Brazilian farmers planted 745,000 hectares of safrinha soybeans, although I have not seen a state-by-state breakdown of their Brazilian safrinha soybean acreage," says Dr. Cordonnier. "If the safrinha soybeans in Brazil have an average yield 2,000 kg./ha. (29 bu. per acre), then that would equate to potentially 1.5 MMT of safrinha soybean production."
Meanwhile, the Brazilian soybean harvest is approaching 80% complete and the safrinha soybean crop will be harvested in May through early June. All soybeans must be harvested by June 15 to avoid violating the 90-day free period that was implemented to minimize the spread of soybean-related diseases.
Dr. Cordonnier has also raised his estimate of the Brazilian corn crop by 1.5 MMT to 70 MMT. He says continued rainfall in Mato Grosso is benefiting the safrinha corn crop.
Consultant raises Argentine corn estimate... Dr. Cordonnier has increased his estimate of the Argentine corn crop by 500,000 MT to 23.5 MMT. He says around 10% of the crop has been harvested, which is behind last year's pace of 18% at this time. He reports that later-planted corn will probably yield higher than early planted corn, and that more than half of the crop was planted after Dec. 1, which turned out to be a good decision. He says if conditions in northern Argentina remain favorable, the estimate could move even higher.
Dr. Cordonnier left his estimate of the Argentine soybean crop unchanged at 54 MMT, but says he has a slightly higher bias and will monitor yield reports as just 3% to 4% of the crop has been harvested.
Dr. Cordonnier also raised his estimate of the Paraguay soybean crop by 500,000 MT to 8.5 MMT due to the increase in safrinha soybean acres.
Senate panel vote set on reviving expired tax incentives through 2015... Lapsed U.S. tax incentives, including biodiesel, would be extended through 2015 in a plan released today by Senator Ron Wyden (D-Ore.), chairman of the Senate Finance Committee. The breaks expired Dec. 31, 2013. As expected, Wyden scheduled an April 3 vote on his proposal, which would cost the U.S. government $67 billion over the next decade in revenue.
Wyden’s plan excluded several tax breaks that may be added through amendments by the committee, including an extension of the production tax credit for wind energy and accelerated depreciation for motor sports tracks. His plan would extend a 50% bonus depreciation, continuing an investment incentive that started in the economic downturn last decade.
PF perspective: The issue is murky in the House, where lawmakers have been focusing on permanent changes to the U.S. tax code.
Soy export tax proposed in Brazil... A proposed tax of 9.25% on Brazilian soybean exports is being met with concern by the agriculture community. The proposed amendment by a senator from Rio de Janeiro was introduced in congress last week, but the government has not officially said if it is considering imposing the tax. If approved, it would cost Brazilian soybean producers more than R$6 billion. The tax would be structured as a 1.6% increase in the PIS (Social Integration Program) tax and an increase of 7.65% in the COFINS (Contribution for the Financing of Social Security) tax.
"Many spokespersons indicated if this tax is approved it could be just the first in a long line of taxes imposed on Brazilian ag products," says Dr. Cordonnier. "They also indicated that Brazilian producers are already at a disadvantage to their competitors (U.S. and Argentina) due to sky-high transportation costs and inadequate infrastructure. They were also quick to point out the Argentine economy is in a downward spiral and they asked why Brazil would want to imitate such a disastrous policy."
Dr. Cordonnier says it remains to be seen if the amendment will gain traction or be "dead on arrival" in the Brazilian congress.
Court upholds CME grain settlement methods... A circuit court judge yesterday ruled that CME Group can maintain its rules regarding grain futures settlement prices at the end of the day. The rules had been challenged by a group of Chicago Board of Trade (CBOT) floor veterans. They claimed CME Group should have held a vote regarding the new settlement procedures before implementing them in June 2012. The group of traders also said the new method that factors in electronic trades for settling grain futures at the end of the day as opposed to the old method that settled futures prices based on open outcry transactions is putting them out of business. In the decision, the judge said the plaintiffs failed to show a "clear right to a member vote."
Crops Analysis (VIP) -- April 1, 2014
Mississippi: Events Promote Better Pasture Grasses in 2014