Brazil?s CONAB report came out yesterday morning. Allendale commodity broker Greg McBride said that the drops in estimations from yesterday?s CONAB report aren?t as bad as they might initially appear.
?For corn, they dropped it by 4.25 million metric tons (mmt), and they?re still looking at a record crop at just shy of 113 mmt,? McBride said. ?Even though it does sound like a big hit- 2.5% lower, it is still one of those things where the early summer crop they have is only about a quarter or less than a quarter of their actual overall percentage. The big percentage of their corn crop comes in with that safrinha crop. That?ll be right on the heels of their beans. So, if the beans are harvested in a timely fashion, we do expect that we?ll see a better safrinha crop or a bigger safrinha crop, and, as long as the rains do materialize for that in the March, April, and May timeframe, they should have a pretty good corn crop.?
McBride said the big surprise was the drop- or lack thereof- in the bean estimations.
?They came out with their bean numbers, and they only dropped them by just a little over 2 mmt from last month, so they?re sitting at 140.5 mmt,? McBride said. ?That is above what a lot of analysts were looking for.?
McBride added that these numbers are still dependent on rain materializing, so there could be further reductions on future reports. However, he said the markets could take a bit of a pause since the damage isn?t as bad as it seemed.
The team at Allendale can be reached by calling 800-262-7538, or you can visit allendale-inc.com.
