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The South America Crop Report for August 30, 2014

Argentina Crop Report

The price offered for soybeans in Rosario, Argentina’s largest grain port, closed the week between 2,300 and 2,320 pesos (US$273 and US$276). Exporters and other agribusiness around the Port of Rosario were impacted by a nationwide labor strike led by left-wing groups and opposition unions demanding higher wages given the current climate of recession and high inflation in Argentina. Meanwhile, heavy rains last week in a key growing region are raising concern over the possibility of significant losses in the 2014/15 wheat campaign which just completed the planting phase, according to the Buenos Aires Cereal Exchange. (Notimerica)

An estimated 200,000 tons of wheat were lost during the heavy rains last weekend, according to the Regional Consortium of Agricultural Research (CREA). The number of tons lost represents about 10% of the total area of the winter crop in the Province of Buenos Aires. More than 180 millimetres of rain (7 inches) fell in some areas of the province last Sunday. The municipalities with the greatest losses were Necochea, Loberia, Tres Arroyos, San Cayetano, Balcarce and Coronel Dorrego. There were also significant barley losses, according to AgroSouth News (CenarioMT Brasil)

93% of the 249 Argentine corn growing regions evaluated by the AACREA will not be profitable this year and, with just a few days remaining before the beginning of planting, the current conditions will have a negative impact on production and the value chain. With these estimates, AACREA says “there are regions of the country that will need to achieve yields 70% higher than the average yield over the past six campaigns in order to be able to cover the costs of corn production with revenue. If producers can’t achieve these results, it will generate negative socio-economic consequences. (Terra).

According to data published by the Entre Rios Cereal Exchange (SIBER), the Argentine Province of Entre Rios posted a 9.5% gain in rice production in the 2013/14 campaign compared to 2012/13. The total harvest in Entre Rios was 506,100 tons compared to 461,900 last year. It’s worth noting the increased yields in rice production considering this year’s rice crop was harvested from 400 fewer hectares compared to 2012/13. Total agriculture production for Entre Rios rose 11.5% this year to 6.248 million tons up from 5.602 million tons last year. (Reporte Arroz)

Brazil Crop Report

The pace of Brazil soybean sales abroad is slowing as the year progresses. In the peak months, Brazilian soybeans were selling for R$70 reales per bag in the ports, but now those prices are fluctuating between R$63 and R$64 this week. The decline, according to analysts, is the result of a lower reference price in Chicago and a further devaluation of the dollar against the Braziian real. On a positive note for Brazilian soybean producers and exporters, there was news this week that soybean stocks in Chinese ports fell by 500,000 tons from 7.3m tons last month to the current level of 6.8m tons. (Cenario MT)

 

Brazil corn exports are growing rapidly and are now approaching 8 million tons year-to-date. Brazil will need to maintain this pace through December if the country is going to reach its goal of 21 million tons of corn shipped in 2014. The pace of exports has advanced significantly in the major port of Paranagua thanks to the recent reduction in loading times. The Port of Paranagua hopes to attract more ships to guarantee and increase the movement of grains and achieve soybean shipments 20% higher than last year. (Suinocultura Industrial)

This 2014 Brazilian cotton harvest should be the best in the country’s history. The total area of cotton production is expected to rise 8% to 1.21 million hectares compared to last year. The total cotton crop is expected to exceed 1.8 million tons versus 1.7m tons last year. “Brazilian cotton producers are going to have to decide whether to plant soybeans in the summer and corn during the winter second harvest or plant soybeans followed by cotton in the second harvest. Given the projections of very low prices for corn, we should see a serious increase in the number of hectares planted with cotton next winter,” said Agroconsult’s Marcos Rubin. (CenarioMT)

A Reuters survey of Brazilian coffee growers in the southwestern regions most severely impacted by one of the worst droughts in five decades (Minas Gerais, Sao Paulo and Parana) revealed that these producers have no plans to increase investment in order to boost productivity. An official estimate by Brazil’s Ministry of Agriculture says the Arabica coffee harvest of 32 million bags is 16% below last year, and many analysts believe the 2015 harvest will be even worse. “You won’t see much enthusiasm for new investment after the drought. There are 30 types of agribusiness with better returns that coffee right now,” said Brazilian producer Luis Hafers. (Reuters Brasil)

Uruguay Crop Report

A large delegation of Uruguay producers are in Iowa this week attending the 2014 Farm Progress Show, one of the most important agribusiness expos in the US drawing 200,000 visitors over three days. Uruguay producers are learning from the estimated 30% of FPS attendees who specialize in technology-based solutions to boost efficiency with lower operating costs while achieving higher levels of productivity. FarmsUY Co-Founder Eduardo Blasina was honored to be asked to be a part of this year’s Uruguay delegation to the Farm Progress Show. (El Observador)

One of the world’s most respected names in agribusiness views Uruguay as a model for agribusiness growth and productivity in Latin America. In a recent visit to Montevideo, John Deere’s Director of Sales for Latin America, Celso Schwengber, shared his thoughts on regional agribusiness : “The region has grown significantly in recent years, especially in the production of grains and soybeans, and Uruguay is a very good example of that growth. Uruguay is surprising for its capacity to innovate,” said Schwengber. (FarmsUY)

The Uruguay Ministry of Livestock, Agriculture & Fisheries (MGAP) just released the results of the the new Agricultural Census, a snapshot of the country that has not been taken since 2000. The total area of land now under some form of agribusiness production is 16.4 million hectares (40.5m acres). According to MGAP, the total area of land dedicated to crops and to forestry both grew over the decade at a rate of 10% per year, sorghum grew by 11% per year, wheat grew by 8% per year and the total area of land dedicated to rice grew by 0.3% per year.  (Espectador)

Uruguay President Jose Mujica will travel to Finland in the coming days to move the agenda forward for signing an agreement for the construction of the largest cellulose plant in South America. The plant will be Uruguay’s third following UPM and Montes del Plata which began operating in June. The new plant will be built in the eastern department of Cerro Largo. Unlike some countries in the region, Uruguay Minister of Energy and Mining Roberto Kreimerman says that Uruguay “has room” to continue opening up the forestry sector to more foreign investment. (LR21)

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