Corn and soybeans are trading higher this morning.
A recent poll of analysts shows that expectations for Brazil’s Safrinha corn crop are to see a large increase of 21% over last year’s crop at 65.3 MMT. Acreage is said to be at 12 million hectares, which is 4% higher than last year. The soybean survey for Brazil showed a drop in production from last year’s record crop of 119.3 MMT. The average results were for 114.6 MMT, which is also below the previous estimates and the USDA’s latest 117 MMT forecast.
Acreage debates continue, the USDA added more fuel when they released their figures at the Ag Outlook Forum last week. For corn, they estimate that producers will plant 92 million acres to corn, up 2.5 million from last year. Soybean acres were listed at 85 million, down over 3 million from last year. Wheat acres were nearly unchanged at 47 million. Many believe the corn and soybean acre switch seems lofty given current market economics, given these forecasts are not survey based leaves some to question their accuracy.
Yesterday’s export sales showed large Chinese soybean purchases hit the books. Uncertainty remains with these sales as offerings from Brazil are well below those of the US. China has purchased US soybeans in good faith from on-going trade discussions. Reports that discussions are positive continue, but the lack of a confirmed deal makes these sales very vulnerable. China has been notorious for cancelling sales, and in this instance it makes more economic sense for them to source soybeans from South America.
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