You can find anything from salami to the biggest tractors on the market at this huge farm show in Brazil.
PORTO ALEGRE, Brazil (Agriculture.com)--It may sound surprising for some in the U.S., but farmers in Brazil will increase the soybean area and expect a new record crop, according to producers attending this week's ag expo in the southern part of the country.
For the 2014/15 crop season that starts this month, Celeres consultancy puts an early forecast of production of 91.35 million tons of soybeans. This would be a 6% hike compared to the current crop.
in the states of Mato Grosso and Mato Grosso do Sul, corn and soybean growers should be cautious with the variation of rains and weather patterns, according to one ag meteorologist.
Approximately 39% of grain farmers in Argentina will need to finance the next crop. The trend is that soybean stocks start to be sold faster soon, so that they get can the money to buy the inputs.
When soybeans reached their lowest value in Chicago since February (US$ 13.63 a bushel last week), it may have turned the red light on for some farmers. That is not the case, however, for the majority of growers down in Brazil.
Argentina has sold approximately US$ 10.1 billion in grains so far this year, according to data from the Center of Cereal Exporters of the country. But the country's farmers are still sitting on nearly twice that amount, with no intentions of selling anytime soon.
In stocks, there is an approximate value of US$ 19 billion in soybeans, and the sales of that amount are not seen on the horizon.
Though tight U.S. old-crop stocks still have the attention of the market, favorable new-crop growing weather and the U.S. soybean export infrastructure are expected to slow imports this summer.
An unusual move from China surprised the market in March, when that country's importers canceled 600,000 tons of Brazilian soybean shipments. As a result, an executive of a major company started to sell soybeans planted in Brazil to some U.S.-based players. And at the same time, the Chinese demand for soybeans shrank from 30% to 20% because of epidemic bird flu cases in the country.
Brazilian farmers have accessed a total of US$ 1.8 billion as part of a storage plan financing the construction of silos and warehouses in 2013-2014. Yesterday, as part of the Brazil Farm Bill, or Plano Safra as it is called here, the government announced a total of R$ 156.1 billion (US$ 70.4 billion) on credit lines available to farmers. Of those, nearly US$ 2.3 billion would be available to farmers and cereal traders to increase storage capacity. On the other hand, the average interest rate paid by farmers increased 1 percentage point to 6.5% a year.
How are less productive farmers able to survive? In northern provinces of Argentina, the answer is smuggling to Paraguay and, to a lesser extent, to Brazil. In Paraguay or Brazil, these soybeans are declared as locally produced.