Evening Report (VIP) -- February 19, 2013

February 19, 2013 08:55 AM
 

WEATHER MODELS WET FOR ARGENTINA AND SOUTHERN BRAZIL... Soybean futures were supported today by disappointing weekend rains across dry areas of Argentina, but meteorologist Gail Martell of MartellCropProjections.com says the forecast for southern Brazil and Argentina calls for an additional 3 to 5 inches of recurring showers this week. However, she notes, "Western Buenos Aires, a key corn and soybean area, missed out on heavy rainfall last week. Drought has continued keeping stress on crops." Click here for more details, including maps.

 

 

CONSULTANT RAISES BRAZILIAN BEAN & ARGENTINE CORN PEGS... South American crop consultant Dr. Michael Cordonnier raised his estimate of Brazil's soybean crop by 1 MMT to 82 MMT due to more favorable weather across the country. "After a slower start, the drier weather (across Mato Grosso) means that the harvest pace is quickening with 17% of Brazil's soybeans harvested compared to 16% last year and 14% on average," he says, also noting weekend rains across southern Brazil that helped to stabilize crops there.

Dr. Cordonnier raised his Argentine corn estimate by 1.5 MMT to 24 MMT. "I have been mentioning for several weeks that my Argentine corn estimate might be too low, but I was hesitant to increase it until additional rainfall actually fell across northern Argentina," he says. "The rains finally arrived over the weekend and I am now more optimistic toward the corn crop in Argentina."

Meanwhile, Dr. Cordonnier left his Brazilian corn estimate unchanged at 70 MMT since a "significant portion of the safrinha corn crop is going to be planted outside the recommended planting window." He says this increases the crop's dependence on moisture until at least late May or early June. He also left his Argentine soybean estimate unchanged at 50 MMT, as he says more rainfall is needed to finish the crop.

 

Dr. Cordonnier 2012-13 Soybean Estimates

Est.
Maximum
Minimum
2011-12

in million metric tons

Brazil
82.0
84.0
79.0
66.5
Argentina
50.0
53.0
47.0
41.0
Paraguay
8.75
9.0
8.0
4.0
Bolivia
2.2
2.5
1.8
2.2
Uruguay
2.0
2.3
1.7
1.6
Total
144.95
150.8
137.5
115.3

Dr. Cordonnier 2012-13
Corn Estimates

Est.
Maximum
Minimum
2011-12

in million metric tons

Brazil
70.0
73.0
65.0
72.5
Argentina
24.0
26.0
22.0
21.0
Paraguay
2.0
2.4
1.7
1.9
Bolivia
0.7
0.8
0.6
0.7
Uruguay
0.4
0.5
0.3
0.4
Total
97.1
102.7
89.6
96.5

 

 

BRAZILIAN SOYBEAN EXPORT SEASON OFF TO SLOW START... Dr. Cordonnier says while drier weather gave soybean harvest a boost in Mato Grosso last week, the export season is getting off to slow start and "is probably going to end up with a much longer tail than last year."

Besides the slow start to harvest, Dr. Cordonnier is concerned that labor unrest -- which is an annual event and coincides with the start of the soybean loading season at ports -- will be more dramatic than usual due to the economic slowdown in Brazil. In addition, he notes, "Labor unions representing workers at the Brazilian ports are already conducting strikes over the plan by the government to privatize nearly 100 grain terminals... If they decide to strike, President Rousseff will take a very hard line concerning their demands just like she did last year when federal workers, including grain inspections, conducted a work slowdown that lasted for several months."

 

 

USDA ANNOUNCES GENERAL CRP SIGN-UP DATES... Today, Ag Secretary Tom Vilsack announced USDA will conduct a four-week general sign-up for the Conservation Reserve Program (CRP), beginning May 20 and ending June 14. Additional sign-ups for continuous CRP programs -- such as such as Highly Erodible Land Initiative and Initiative to Restore Grasslands, Wetlands and Wildlife -- will be announced in spring 2013. About 27 million acres are currently enrolled in CRP. Get more details.

 

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