Tidbits, Soybeans, Markets & Rain Days Update 1/28/23
The real (ree-al) is the currency of Brazil. As its exchange rate strengthens in the world markets, it makes Brazilian exports more expensive, just like every country with a strong currency. And, just like every other country with their currency increasing in value, the market value of their exports must be reduced to be competitive in the world marketplace. Brazil's corn and soybean prices are declining as the exchange rate of the real rises. Farmers are not selling nearly as much of their new crop beans and corn as normal. The stronger real coupled with the farmers being slow to sell anything means Brazil's 2023 export pace is off to a very slow start.
Gosh, who else has beans and corn to export during the next five months? Argentina? It is a little dry there. Ukraine? There are several export problems there.
Every day the rain continues in northern crop areas of Brazil is another day later the safrinha corn crop will be planted and the less it will yield as the dry season starts before the safrinha crop is mature even in a good year. Persistent January & February rains two years ago led to the safrinha crop being 600 million bushels less than the previous year. That 600 million bushels came right off the top of their corn exports. Six hundred million bushels = 51% of the corn expected to be on hand in the USA this coming August 31st (aka carryover). What do you think will happen to the price of corn this summer if the safrinha planting delays continue another two weeks?
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