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Senior Advisor

Wheat: Continuing assault on quality, Brazil.

Severe rain events have ruined much of Brazil's wheat as milling quality. Argentina may only have 6 MMT to export and Paraguay's crop was damaged also.

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Senior Advisor

Re: Wheat: Continuing assault on quality, Brazil.

The whole global quality trend begs this question. Since low quality wheat generally becomes feed, how much wheat will be available for human consumption? And at what point does the demand for quality affect the price of it? A clue might be seen in HRS 15% which has as much as a $6 or more premium and White Club (used by Japanese millers to blend with common white to get their preferred milling quality) is at a $2.50 premium.

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Contributor

Re: Wheat: Continuing assault on quality, Brazil.

Well Palouser, Argentina is projected to raise 12.5 MMT (it's a bit early to ensure that number tough).

 

We use 6.5MMT for ourselves and would be in conditions to export 6MMT... IF AND ONLY IF our goverment allows it. We are still waiting permits for 1MMT that we're announced and never allowed to leave this year.

And even if we are allowed to export 6 MMT, it'll be throughout the year, meaning that by the time Brasil needs wheat, we won't be in the market.

 

So, unless something unexpected happens, that market is yours (north american) for the taking... once again

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Senior Advisor

Re: Wheat: Continuing assault on quality, Brazil.

I think the state growers organizations may have some numbers but, if true milling quality wheat is separated from lower quality I assume our supplies are quite a bit lower than the gross numbers. And that will be true for Canada, EU and Ukraine. And probably the Aussies as well, though that situation isn't finalized. Russia and Khazhkstan have milling quality but appear priced out of the market for now. When winter comes shipping from the Black Sea always is limited.

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Senior Contributor

Re: Wheat: Continuing assault on quality, Brazil.

I was in the field yesterday and this passed... What I hear the most from wheat growers in southern Brazil is that they hate the mills. They believe this quality talk is unfair and they always push the prices down. In the case of some regions, wheat has been changed for canola in some cases. Canola is paid based on the soybean price and used on biodiesel plants in Rio Grande do Sul and usually the grain is sold immediately. This has been seen mostly in Lagoa Vermelha, northeast of that state. This is also seen in the Northwest, the most traditional grain region of Rio Grande do Sul, but in that case it has not been very sustainable. Canola is very sensitive to losses and that scares farmers. In the case of Lagoa Vermelha, there is an agronomist who pushes the canola planting and imports the inputs reselling for farmers. The majority of the inputs to plant the grain are not manufactured in Brazil. A lot of farmers still hold surpluses of wheat from the last crop. The cost to grow canola is half the cost to grow wheat in Rio Grande do Sul. 

 

Here there are photos from Lagoa Vermelha and Não-Me-Toque: 

 

 

 

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Senior Reader

Re: Wheat: Continuing assault on quality, Brazil.

Luis,

 

Nice photos. Is this the equivalent of a 'Sunday Drive', in the U.S.? It looks like a great day to scout crops.

 

Thanks for the information,

 

Mike

 

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Senior Reader

Re: Wheat: Continuing assault on quality, Brazil.

Caveman,

 

Thanks for checking in. I love your intell from Argentina. Keep it coming, sir.

 

Mike

 

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Senior Contributor

Re: Wheat: Continuing assault on quality, Brazil.

Yes, Mike.  And by the way, I'm not sponsored by Nissan, but I put my car on the photo to show to some Americans unfamilar with Brazil the size of a popular here. 

 

There is also a problem with canola. You will need a good agronomist to help you out and you will need patience and a lot of work. The seeds are very small...

 

 

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Veteran Advisor

Re: Wheat: Continuing assault on quality, Brazil.

Nice ride. And as far as I can tell, nice-looking crop.

 

Mike

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