The thought of genetically enhanced soybeans pouring out of Brazil must be unsettling to farmers in the U.S., whose title as world's largest producer of the crop is under threat from South America. In fact, the outcome from this year's harvest in the southern hemisphere will have a wide-ranging impact on global prices and supplies.
In Brazil, soybean planting is near completion. Although early-season moisture conditions are varied at this point, the weather pattern seems to be positive. However, Asian soybean rust is spreading in the country, causing concern for farmers. Moist weather conditions have helped the disease spread to 74 districts across eight states. According to the government's crop research agency, Embrapa, the rust is up from last week's report of 34 districts and six states. It's expected to increase next month when most of the crop enters the reproductive phase.
If soybean production around the world meets high expectations, prices will have a hard time going above current levels. As a result, Brazil's Agriculture Ministry is lobbying its Finance Minister and members of Congress for money. It wants to offer producers a chance to store up to 14 million metric tons of soy, corn and other crops from February 2005 so they aren't forced to sell during a post-harvest cycle of low prices.