How much Will the Americans Plant Soy?

How much The Americans Will Plant Soy?  

Prof. Dr. Marcos Fava Neves

Let’s go to the summary of the main facts of this month’s agribusiness, Beginning with the new crop projection made by CONAB, from 234,120,000 Tons of grains, 2.8% growth in volume and 1.3% in productivity in Relation to the 2017/18 crop. But This estimate already reflects somewhat the problems Since it fell 1.3% in relation to the previous estimate. The Total area Cultivated with grains is 62,630,000 hectares (1.5% above the previous). The Soybean, which suffered more with the climate of January, fell from nearly 120 million to 115 million (3.4%) But the cotton was positively surprised.

AgRural already estimates the soybean crop in only 112.5 million tonnes, 5.7% less than 2018/17. Aligned with this expectation, The ANEC (National Association of Cereal Exporters) believes that exports of Soybean Fall 12% this year, staying at 73 million tons, against almost 83 million of the previous crop, coming from a crop of 116 million tons. Have With this great loss of income that would enter in Brazil.

Important Price trainer is what is Expected of American production, which will be planted this semester. By USDA, the Soybean area drops from 36.06 to 34.4 million hectares and the corn goes from 36 For 37 million hectares. In soybeans should produce 113.6 million tons, Decrease of 8% in relation to 123.6 million of this crop, knocking down stocks in 2 million tons. In maize The expected production is 378 million Tons, well above 366 million this year. How stocks are Comfortable, we walk to a situation now of stable international prices. The FAO’s food price index rose 1.8% in January and is 3.7% below January 2018, mainly pulled by the dairy.

In Brazil, the expectation is now for the Climate in the second corn crop, where they are expected, by CONAB, 65.1 million of tonnes, 21% more than in the previous crop. Prices in Brazil fluctuated Positively in the month of February. According to the CEPEA, the high was 4.5%. I Hit it by suggesting that the producers don’t sell grains in last month’s article. The soybean rose 1%, reaching almost R $78 in Paranaguá. According to CONAB consumption Maize in Brazil in the 2018/19 crop should increase 4.4% by reaching 62.5 million of tonnes, partly by the demand of ethanol plants and rations due to the Increased consumption of meats with the resumption of the economy.

Closed the first numbers of the year, in January the agro exported US $ 6.626 billion, 7.4% more than the same month of 2018. Imports Rose 0.5%, and the balance stood at US $5.384 billion (9.2% above). Forestry Products They gave a show, leading the board with US $1.452 billion (26.3% more). Complex Soybean came second with US $1.329 billion (28.9% above) and meats with US $ 1.030 billion, 13.1% fall. China bought 23% of the total exported, and grew 31% compared to January 2018. Soybean exports and Maize, and only in January were 2.3 million tons (56% more than January 2018) of soybean, bringing US $815 million. It is Expected for February sales of 6 million tons (ANEC), with the arrival of the harvest.

Already denoting some recovery, in 2018 the food sector grew 2.08% according to ABIA (Brazilian Food Industry Association). The Total Revenues reached R $656 billion and jobs increased by 0.5%, generating 13 Thousand additional opportunities to more than 1.6 million existing ones. ABIA expects In 2019 grow around 3% in volume and sales. From the total turnover of ABIA companies, the proportion is 22% for animal protein, 20% for beverages, 10% Dairy, 10% coffee, teas and other cereals, 9% oils and fats and almost 6% For wheat derivatives. In This 2018 the sectors that grew the most were oils and Fats (12%), vegetables, fruits and juices (11.2%).

In the highlights of the companies this month of February, it is worth highlighting Tyson Foods who bought the BRF operations in Europe and Thailand.

The newly created Brazilian Association of Internet of Things (Abinc) Estimates that only in the 2018/19 crop are investments in technological innovations Must go from R $100 million. This brings positive impacts on productivity, With the greatest use of sensors, equipment and other services that measure the Activities and conditions of climate, soil, plants and machine performance.

Good News to the coffee sector, Nestlé announced that Brazil will Produce coffee capsules with the brand Starbucks, brand that purchased for more than US $7 billion last year to participate more actively in the market for Differentiated products. The Nespresso here consumed comes from Switzerland. The Company Believes in market growth by 5% a year in this decade. With the acquisition, Nestlé Has brands for different consumer segments with Nestlé, Nescafe, Nespresso and Now to Starbucks.

To Close, we will now observe in March the Following variables: An agreement is made between China and the USA (China has proposed Buy US $30 billion more in US agro products), the expectation of Planting of soybeans and maize by Americans, the behavior of foreign exchange and climate Incident about the Corn Safrinha in Brazil. But I believe in stability in Prices.  

Marcos Fava Neves is Full Professor (part-time) of USP’s Management Colleges in Ribeirão Preto and FGV in São Paulo, a specialist in strategic planning Agribusiness. Check out texts, videos and other materials on the website

Analysis and Market

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