On Friday morning, the USDA announced the sale of 297,000 mts of old crop soybeans to China. The only reason China is buying old crop US soybeans during Brazil’s bean harvest is because they know Brazil is not going to have enough beans to meet China’s usual demand this marketing year.
On Friday, the S&P 500 stock index made a record high for the first time in two years.
Eduardo Lima Porto is the founder of LucrodoAgro Consultoria Agroeconomica which is dedicated to consultant services for agricultural production and processing sector of Brazil’s economy. He specializes in market analysis of soybeans, corn and agricultural inputs. He is also a supply chain and risk management advisor for resellers, cooperatives and agricultural groups.
He predicts 2024 will be a financial “reset” year for agriculture in Brazil due to poor weather, high interest rates, high farmer debt due to high input costs the past two crop years culminating in many farmers defaulting on debt service or payments to suppliers. Eduardo predicts it will take the agriculture sector several years to heal from the payments defaults that will occur in 2024.
Editorial comment from Roger: