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Contributor

Re: Maybe he's just delivered the landlord his share.

He’s going to make sure he drops that big buck he’s been feeding all year. Is that even considered baiting when the pile is that big?

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fredericoschmi
Frequent Visitor

Re: Corn Market That Bad?

That happens a lot here in Brazil, but here we dont have rain after the crops. That doesn't sounds good.

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Veteran Advisor

Re: Corn Market That Bad?

fredericoschmi,

 

Thanks for checking in from Brazil. What's the latest, from your neck of the woods? Are you done planting this year's soybean crop? I hear prices are very strong, allowing for a lot of farmer-selling? Plus, are you forward-selling the crops that you are putting in the ground right now?

Also, how is this tariff on steel and aluminum going to impact you and your Brazilian farmer counterparts? It would be interesting to hear your perspective.

 

Thanks,

 

Mike

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fredericoschmi
Frequent Visitor

Re: Corn Market That Bad?

Hello Mike, my pleasure.

Soybean plantings are mostly done in the key areas with only some regions still a bit delayed but not bringing bigger concerns yet because mostly weather forecasts are favorable from now. The region with biggest delays are Matopiba, mainly northeastern regions in Brazil, who contribute on production but are not the key players.

On the sales side, producers are getting better prices in brazilian real if compared to last year and compared to costs as well, so this is helping on sales. In general I could say we are seeing around 10% more forward sales if compared to last year.

Now about the tariff, my views and the views I get from farmers and markets is not positive. At first it only tends to impact the metal sectors but it will bring pressure on government to hold currency levels and its not positive because most opinions are that brazilian real is already artificially overvalued and a fair and lower level should be pursued. Government understanding is that we need a more devalued currency to attract more foreign investments. It will be a volatility factor from now. In one hand we are expecting the brazilian currency to continue devaluing but in the other hand trade war talk might hold on things, even more if the tariffs and/or sanctions get stronger.

Thanks,

Frederico Schmidt

 

Veteran Advisor

Re: Corn Market That Bad?

Frederico,

 

Great insight. I do appreciate it. And, if you would be so kind, please drop into this forum during Brazil's planting and growing season and let everyone know how the crops are growing, if you have Asian Soybean Rust spreading (I hear that might be a problem again this year), weather updates, crop progress. First-hand reports, like yours, are invaluable.

 

Thanks, again, and please keep up the good work.

 

Mike

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fredericoschmi
Frequent Visitor

Re: Corn Market That Bad?

I appreciate Mike. I always like to take a look here as well.

We found some focus of Asian Soybean Rust in my region here, southern Brazil, important area, but so far are isolated cases and are being monitored closely. This thing cant spread, the damage can be big. So far, another thing to keep our eyes on.

 

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Veteran Advisor

Re: Corn Market That Bad?

Fredericoshmi,

 

Yes, I've been down there many times and have witnessed the damage.

IMG_2558.JPGAsian Soybean Rust-infected beans

I was in Brazil, in 2007, and witnessed the devastation of ASR on soybeans. This was a research plot. but, it was amazing to see a complete field of rust just destroying the plants.

 

Mike

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Highlighted
Honored Advisor

Re: Corn Market That Bad?

Fred,

You mention price compared to costs.  Do you have flexible costs?  Seed, fertilizer, fuel, equipment etc.   Do you have enough competition in your economy to see costs decline when prices decline?

The US is farm economy is dominated by international corporations that are inflexible in pricing because they have been granted (through technology and regulation), monopoly status.  We talk about lots of other things, but this is dragging agriculture into serious economic problems.  

 

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fredericoschmi
Frequent Visitor

Re: Corn Market That Bad?

My answer is that here not so different from there. The main thing here is the currency value because it impacts on most costs for producers, even more than any flexible or local competition can do sometimes. In 2018 for example brazilian farmers were able to fix their costs prices in a dolar between BRL 3,70 and 3,80 and now they are being able to sell the crops in a dolar between BRL 4,10 and 4,20. Thats one of the biggest reasons costs are better compared to end prices. 

But in 2017 crop was the opposite. So, sometimes it helps, sometimes its more difficult. As we live for exporting and we need importing, currency is a big issue here.

Honored Advisor

Re: Corn Market That Bad?

Thank you Fred.

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