(WCIA) — The US grain markets have been quite sensitive to South American crops.
Doug Cropp, grain merchandiser at Premier Cooperative, provided a market outlook last week, and says U.S. farmers need to pay attention to the Brazilian weather.
“It’s been wet, and they need to watch that weather and how that harvest has been going on and also to see what their yields are,” says Cropp. “Kind of like our reporting in the US, the same thing there.
“They are going to start reporting yields and how those come out, so it’s going to be very important to watch that, as we see some issues there. And looking at those yields to decline as we move forward, which should help support U.S. prices or the overall global price of soybeans.”
WCIA says to Cropp, “Now when we look at their soybeans, they have had a lot of rain in the middle of harvest and we see a lot of pictures of those beans being pretty rotten looking.”
“That’s the other thing,” Cropp says. “USDA has not changed the yield there yet. Internally in Brazil they are. And if you look at soybeans and they get the yield, will they be merchandisable quality. There’s going to be some poorer quality, what are you going to do with those. Do you blend them? Or maybe they won’t be able to sell them.”
WCIA says to Cropp, “As far as corn, they are at a critical point. They’ve got to get the ‘safrinha’ crop planted, and it’s already late in the year.”
“Yeah definitely, that’s the big thing about the soybean, they have to get those harvested to get the corn planted,” Cropp says. “Definitely their safrinha crop is the largest corn crop in Brazil, the second one. And its getting late so it is something to watch.”
WCIA asks Cropp, what sort of a problem would that create for farmers who are thinking about selling early corn, anyway?
“Yeah, definitely that is going to be a big issue because theirs gets marketed just before ours does,” he says. “If it’s a month later in planting it’s going to become due about the same time ours is. When you look at the export side and the corn price it will be another competitor, so they will have supplies to compete against the U.S. early harvest.
“Maybe we won’t see that big push at the beginning of harvest for the premiums if South America has their supply available.”