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Brazil: Soybean Crop Projection Rises

posted on February 4, 2005


USDA this week announced national and county loan rates for the 2005 corn and soybean crops. USDA says it paid close attention to reducing loan rate differences in neighboring counties that are NOT the result of market forces. The new county rates will be available on the Farm Services Agency Web site by February 5th.

The national loan rates set by the 2002 farm bill are $1.95 for corn ... and $5.00 for soybeans.

Producers use the loan rates to help determine their marketing strategies ... a process that's becoming more complex because of the global influence of crop production in places like Brazil.

Brazil: Soybean Crop Projection Rises Drought concerns in southern Brazil are dissipating, thanks to several weeks of rain. And though reports persist of Asian soy rust, officials in Sao Paulo this week found reason to boost their estimate of production for the 2004-2005 soybean crop.

Brazil now places its soybean projection at 63.43 million tons. That's more than 2.3 billion bushels ... and a 29 percent increase over last year's harvest.

Officials credit the larger crop to better weather, as well as improved crop conditions. They also note that soybean planting increased by 6 percent this year to 56.5 million acres.

The prospects for a sizable Brazilian crop are pressuring soybean prices. Nearby futures prices are hovering at contract lows ... and private estimates that Brazilian farmers have sold only 27 percent of the new crop are fueling the bear market. Things could get worse before they get better, as many traders believe a lack of storage will force South American farmers into selling the new crop at depressed prices.


Tags: agriculture Brazil crops markets news trade