The South America Crop Report for March 20, 2016

By Patrick Archer

The Argentina Crop Report

The current harvest is beginning to exert downward pressure on soybean prices in Argentina. Plants near the Port of Rosario are offering around $3,050 pesos per ton for delivery before March 31, according to a report from the Rosario Grains Exchange (BCR). The report says these same plants would probably accept counteroffers of $3,100 pesos. The US dollar equivalent at these levels would be the US$214 per ton being offered for April and May delivery at the Port of Arroyo Seco. The May position for soybeans closed at US$215.30 at the Buenos Aires Futures Market (MATba). (La Nación)

The first projections for Argentina crop returns in the 2016/17 campaign suggest that corn is going to be more profitable than soybeans, says Martín Fraguío, executive director of the Argentina Corn Association (Maizar). Fraguío says, “Since the time of the presidency of Alfonsín (1983-1989), we have never had a moment when corn was more profitable than soybeans, and now that is the case thanks to both higher yields and the measures taken by the government with the elimination of the export tax on corn.” The Buenos Aires Grains Exchange is forecasting 25 million tons of corn in this harvest. (El Litoral)

The United States is buying significant quantities of Argentine wheat and soybean flour for the second time this year. After shipping 39,000 tons to North Carolina in January, a second ship left the Port of Zárate bound for the Port of Wilmington on Wednesday with 23,494 tons of wheat and 24,456 tons of soybean flour. Local officials credit the strength of the US dollar and the local liberation of trade under Mauricio Macri. According to port records, Argentina will ship 1.05 million tons of wheat over the next two weeks to the US, Brazil, Ecuador, Egypt, Thailand, the Philippines and Vietnam. (AgriTotal)

The Brazil Crop Report

The 2015/16 soybean harvest will reach a record 101.7 million tons which will be a 4.6% increase over the previous campaign, according to a new forecast from Agroconsult. The national production average is expected to rise a modest 0.5 sacks to 51 sacks per hectare. Agroconsult’s André Pessôa tells Globo the national average is masking some very good news, favorable rainfall in states like Rio Grande do Sul and Goiás, and some very bad news, drought in the Matopiba region. Brazil is the world’s second-largest producer of soybeans after the United States. (Globo Extra)

On Thursday the Association of Soybean and Corn Producers of Mato Grosso, Aprosoja-MT, published a letter supporting the impeachment of Brazilian president Dilma Rousseff. In the letter the association says: “The appointment of Luiz Inácio “Lula” da Silva to the position of chief of staff is disrespectful to Brazilian national sovereignty. As the legal representatives of Mato Grosso soybean and corn producers, we are going public with the urgent need for the immediate replacement of this government.” The release this week of tapped phone calls between Rousseff and Lula only added fuel to pro-impeachment protests nationwide. (Canal Rural)

Brazil will be the world’s largest agriculture exporter by 2024, according to the Organization for European Economic Cooperation’s annual report on farming perspectives released this week. The OECD estimates total plantings in Brazil will expand 1.5% per year between now and 2024 eventually reaching 171 million acres. The four crops expected to grow the most in terms of planting are sugar cane (37%), cotton (35%) and oilseeds (23%). In terms of yields, the OECD believes Brazil will make the largest gains in wheat and rice production with more modest gains in cotton and sugar cane production. (Jornal Floripa)

The Uruguay Crop Report

Uruguay’s largest and most important agriculture exposition, Expoactiva, takes place this week in Soriano. This year over 300 companies representing 750 brands will be in attendance at Expoactiva including ADM, BBVA, CAT, Claas, Cummins, HSBC, John Deere, Louis Dreyfus Commodities, New Holland, Nidera, Nissan and Volkswagen. A virtual map of the exhibitors can be seen here. In addition to testing the latest machinery, Expoactiva attendees will have the chance to hear over a dozen invited speakers including FarmsUY co-founder Eduardo Blasina who will present his annual forecasts and agribusiness yearbook, Farming Perspectives 2016. (El Observador)

Speaking at the inauguration of Expoactiva, Uruguay’s Minister of Agriculture Tabaré Aguerre made two important announcements regarding cellulose and irrigation. Regarding cellulose, Aguerre says the government is currently in talks with UPM regarding the construction of the country’s third cellulose pulp mill. While he did not disclose the proposed location of the plant, Aguerre said construction could be conditional on the improvement of highway and rail infrastructure facilitating delivery of cellulose exports to the Port of Montevideo. Regarding irrigation, Aguerre says the government is on the verge of introducing a project to the legislature that will help promote irrigation projects nationwide. (El País)

This week Fitch Ratings maintained its investment grade rating for Uruguay. The BBB- rating was issued in a press release by Fitch with an outlook of “Stable” for the country and says the primary risks for the country would be failure to contain rising public debt or the inability to stimulate economic growth over the short-term. Uruguay’s president, Tabaré Vázquez, shared the news with the country on the national airwaves and said “maintaining the investment grade rating for our debt is a priority especially at moments like this when access to the global capital markets is getting more expensive.” (Blasina & Associates)

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