Growers in South America are ready to harvest as farmers in the United States look to plant. Sometimes, what happens with South America’s harvest impacts the markets for growers here at home, especially during this time every year. Farmers, brokers and analysts are looking for those market hikes.
Pro Farmer reporting weather forecasts lean negative for South America the next two weeks.
Rich Nelson, the chief strategist with Allendale, says the harvest in Brazil is not at an accelerated pace like last year.
“It’s not going to be a massive build up for a second crop but [farmers in Brazil] will plant what they need,” says Nelson.
Clinton Griffiths, Farm Journal editor and AgDay host, asks Nelson if U.S. exports can keep up with Brazil when it comes to soybeans.
“Without some type of mandated buying, no, they cannot,” says Nelson. “Let’s be very clear about that.”
When it comes to the crop size, he says USDA expects a big crop in Brazil.
“It does give us some more pressure in these next one to four months ahead of us in the export market,” says Nelson. “Without Chinese buying, we’d have some serious problems here.”
The main question is where China could potentially buy next, especially since the country signed a Phase 1 trade deal with the United States.
“The question for us is if there’s Phase 1 buying, part of it will hit during this old crop season, meaning June, July and August. The question for us is whether that’s 100 million bushels or 400 million bushels or whatever the number is,” says Nelson.
Nelson says Brazilian farmers have incentive to plant and harvest. He notes there’s a discount to U.S. product now too.
“For the most part, they’re not seeing a big swing or dip in prices as they go into the harvest time frame,” says Nelson.
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