Highlights
We cannot find any numbers for the March NOPA Soybean crush numbers. They are scheduled to be released on the 15th of every month exclusively to Reuters News Service. Reuters has nothing about yesterday’s crush report. USDA announced yesterday morning the sales of: 121,000 mts of old crop soybeans to China 268,000 mts of new crop soybeans to China 272,000 mts of new crop soybeans to Chinese company 177,000 mts of old crop soybeans to unknown destinations
Argentine grain trucks are rolling again. The government has guaranteed the truckers a freight rate hike of 20% and a “normal” supply of diesel fuel. Dr. Michael Cordonnier is the agronomic guru for South American crop production. He has studied SA crop production for more than four decades. No one has more credibility about SA crops than Michigan State’s Dr. Cordonnier. He reported yesterday:
It appears that the annual dry season in Central Brazil may be starting earlier than normal this year. Usually, the last significant summer rains occur in early May, but many areas of Central Brazil received their last significant rainfall 15-25 days ago with some areas on northern Minas Gerais already being dry for 50 days. The crop most impacted by an early start to the dry season is the safrinha corn.
Safrinha is the second crop corn planted after soybeans and cotton. Brazil’s farmers used to grow two crops of soybeans and very little corn until the Asian Leaf Rust hit 20 or so years ago. The first year of Asian Leaf Rust was the only year of the past 50+ years that a soybean crop was smaller than the previous year… until this year.
To make it very difficult for Asian Leaf Rust spores to survive the dry season, planting second crop beans became illegal. Substantial fines can be levied if even one volunteer soybean plant is found behind the machine shed in May or June.
The reason farmers did not grow second crop corn twenty years ago is the sandy soil and hot temperatures made soybeans much more productive than second crop corn, which never gets mature before the dry season begins.
The second best crop to double is corn. Safrinha is Spanish for “little one.” Although about 78% of brazil’s corn production is the Safrinha crop, it is the “little one” because yields are less than half of the first corn crop; 85 to 90 bushels is normal yield range. If a farmer gets lucky and has good rain the third week in May, he will most likely exceed 100 bushels of yield.
Because of Asian Leaf Rust, Brazil went from a net corn importer to the world’s #2 corn exporter in just 15 years. One of the main reasons corn prices have been so strong the past year is the Safrinha crop got planted late last year and the dry season came as normal to maybe a bit early. The Safrinha crop was 600 million bushels less than the year before. Every one of those 600 million bushels had to be replaced in the world export market. And then 550 million bushels of the world’s export corn got bottled-up in #4 corn exporter Ukraine two months ago.
If you care about the price of corn, every morning you should be looking at our “Rain Days” chart to see the number of rainy days expected for Rondonopolis and Campo Grande. These areas are representative of the majority the Safrinha crop. If the rainy days decline to 1 or 2 out of ten days this month or early May, it will give us some high priced corn… really high priced corn.
Russia’s blockade of Ukraine has 57 vessels in Ukrainian ports loaded with 1.25 million tons of grains and vegetable oils. Ocean freight insurance companies will not provide vessel nor cargo insurance. Until they do provide insurance, vessels will not leave port until the black market money makes it worth the risk for the ships’ owner.
Egypt has approved the quality of India’s wheat is good enough to be imported. Last year, India exported 2.1 million mt; they expect to export 7.85 million mt just as fast as the ships can be loaded. They want to get the wheat shipped before the war in Ukraine is over.
Most of Shanghai’s 25 million residents are desperate to buy (or steal) food, but the grocery stores have very little food to offer for sale because people who drive trucks are not allowed to leave their homes due to COVID lockdown. The warehouses at the port are jammed with food and ships with food wait to unload more food. Warehouse space is becoming available because the perishable food in the warehouses is spoiling. It is being removed from warehouses and being piled in the streets because there are no trucks to haul the food before or after it spoils.
The logical question is: What is the Chinese government trying to accomplish by creating this manmade disaster?
China said on Friday it would cut the amount of cash that banks must hold as reserves for the first time this year, releasing about 530 billion yuan (US$83.25 billion) in long-term liquidity to cushion a sharp slowdown in economic growth.
The People’s Bank of China (PBOC) said on its website it would cut the reserve requirement ratio (RRR) for all banks by 25 basis points (one-fourth of a percent), effective from April 25, but analysts said it might not yet be enough to reverse the slowdown of the Chinese economy.
Market Data
This morning: Crude oil settled at $106.54, up $2.29 The dollar index settled at 100.50, up 0.18 July palm oil settled at 6,320 MYR, up 197. The contract high was made March, 9th at 6,531 MYR. Palm oil owns 36% and soybean oil owns 28% world market share. December cotton settled at $122.48, up $0.30 per cwt. The contract high was made April, 14th at $124.36 per cwt. Cotton competes with soybeans and corn for acres. July natural gas settled at $7.501, up 0.328. The contract high was made April, 14th at $7.548. Natural gas is the primary cost to manufacture nitrogen fertilizer. July ULSD settled at $3.5024 per gallon, up 0.0951. The contract high was made March, 9th at $3.7675. ULSD stands for Ultra Low Sulfur Diesel.
Rain Days Update
The Western Corn Belt has 14 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 2 more rain days than yesterday.
