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Tight supply situation

Agriculture.com Staff 02/15/2008 @ 7:00am

The world is looking for any hint that some of the crop supply issues will be resolved with the next crop that is harvested. With crops now growing in the southern hemisphere, many were hoping some relief would be provided in the form of larger crop sizes. But once again, it seems several crops are disappointing. The relief is once again postponed.

Maybe that is too negative a thought. But when was the last time there was a bin-buster? How about estimates of a crop’s size that actually grew over time, or came in better than initial expectations?

The southern hemisphere season started off with a small drought-affected Australian wheat crop. Then there was the frost-reduced Argentine wheat crop. Now, the Argentine corn crop looks like it has been reduced by drought and heat. Even though more corn was planted, the USDA has a slightly lower crop size, at 21.5 million metric tons, versus last year’s 22.5 mmt crop. Does this number continue to fall as damage becomes more apparent? Argentina is the number 2 corn exporter in the world, so this crop is key.

How about Brazilian beans? The latest number from the government earlier this week was 58.5 mmt, virtually unchanged from last year, in spite of an increase in acres. Some areas have been too dry (in the south), some have been too wet (Mato Grosso) and the Brazilian version of the battle of the acres resulted in less of an acreage increase than originally thought.

Treading water is not where we need to be!

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The world is looking for any hint that some of the crop supply issues will be resolved with the next crop that is harvested. With crops now growing in the southern hemisphere, many were hoping some relief would be provided in the form of larger crop sizes. But once again, it seems several crops are disappointing. The relief is once again postponed.

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