Cordonnier Raises South American Crop Pegs

Posted on 03/09/2017 10:24 AM

"In many areas of Brazil, with the exception of Mato Grosso, the soybean yields continue to creep higher as harvest moves into the medium-maturing varieties," according to South American Crop Consultant Dr. Michael Cordonnier. He says that northeastern Brazil is the lone area where weather is still a concern. The weather there has been dry this month, and there is little precipitation in the near-term forecast for the region. But that area accounts for just 10% of the country's soybean production. Therefore, Cordonnier raised his 2015-16 Brazilian soybean crop peg by 1 MMT to 99.0 MMT and he has a neutral to higher bias going forward.

He also raised his corn crop estimate for Brazil by 800,000 MT to 84.0 MMT. He explains that domestic corn prices in Brazil remain "very strong and there is a big financial incentive to plant safrinha corn, if the weather cooperates." Cordonnier says reports of strong fertilizer sales and corn seed sales in some areas also point to higher safrinha corn acres.

Cordonnier left his Argentine soybean crop peg unchanged at 59.0 MMT, though he said that the crop peg could move higher. Regarding last week's heavy rains that led to flood emergency declarations in some provinces, Cordonnier says, "Certainly there are localized low-lying areas where the crops suffered significant damage if not a total loss, but on a nationwide basis, the rains probably did more good than harm." But he cautions that could change if additional heavy rains fall in soaked areas.

He did raise his Argentine corn crop estimate by 1.4 MMT to 25.0 MMT, noting that last week's rain were beneficial for crops outside of low-lying areas. He also points out that early corn harvest have come with reports of yields above the historical average. He has a neutral to higher bias going forward.

Dr. Cordonnier 2015-16 Soybean Estimates
Est.
Maximum
Minimum
2014-15

in million metric tons

Brazil
99.0
103.0
96.0
96.2
Argentina
59.0
60.0
57.0
60.8
Paraguay
8.8
9.3
8.3
8.4
Bolivia
3.0
3.3
2.7
2.6
Uruguay
3.5
3.8
3.2
3.1
Total
173.3
179.4
167.2
171.4
Dr. Cordonnier 2015-16
Corn Estimates
Est.
Maximum
Minimum
2014-15

in million metric tons

Brazil
84.0
87.0
81.0
85.4
Argentina
25.0
27.0
23.0
27.0
Paraguay
3.1
3.4
2.7
3.0
Bolivia
0.7
0.8
0.6
0.7
Uruguay
0.5
0.6
0.4
0.5
Total
113.3
118.8
107.7
116.2

 


 

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