Up to 8 million tons of soy have drowned in Brazil – Analysis Grains & Raw Material

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Analysis Grains & Raw Material

Yesterday 12:25 pm – Jurphaas Lugtenburg

In the Netherlands we had to deal with local flooding last night and last night. This does not exactly cause players in the grain market to panic. That is different with the severe weather that is ravaging the south of Brazil. Entire plots of soy are under water there. According to Amis, the growing conditions for grains in the Netherlands and Germany are not unfavorable. The new Crop Monitor therefore runs counter to observations from the field.

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The May wheat contract on the Matif closed yesterday €0.25 lower at €204.75 per tonne. Grain prices were on the rise on the CBoT. Wheat rose 0.9% to $5.85½ per bushel. Corn rose 2% to $4.52 per bushel. Soy was the biggest gainer on the Chicago exchange, closing 3% higher at $11.90 per bushel.

In the Netherlands we have to deal with local flooding. That pales in comparison to the amount of rain that has fallen in the far south of Brazil. The province of Rio Grando do Sul has been experiencing persistent heavy rainfall for days. Yesterday a dam collapsed under heavy rain. The floods have killed 30 people and left another 60 missing. The BBC reports that 15,000 people have had to leave their homes because of the rising water and that 500,000 people no longer have electricity and clean water.

Necessity knows no law
In addition to the human suffering, agriculture in Rio Grando do Sul is also hit hard by the floods. Estimates vary, but somewhere between 4 and 8 million tons of soy could still be harvested in the area now underwater. The USDA estimated the Brazilian soy harvest at 155 million tons in the latest Wasde report. Conab kept their forecast at 146.5 million tons. Now, not all the soya that is still standing will probably have been drowned, but it is likely that there will be a significant correction to the yield forecasts. It is not without reason that soy made a leap on the CBoT. In the meantime, farmers are doing everything they can to get their crops in one way or another. ‘Save what can be saved from the approximately 30% of the soya that still needs to be threshed’ is the gist of the message below.

Amis has published the new Crop Monitor. The most striking thing is that the Benelux and Germany are colored green with a favorable week for grains. This is not consistent with reports about the relatively extreme and persistent wet conditions in Northwestern Europe. For example, the scientific office of the European Commission and the German association of cooperatives warned last month of disappointing grain yields due to unfavorable growing conditions.