|
Trucks are lined up
for 25 miles at
Alta
Araguaia, Mato Grosso. They are trying to dump soybeans at the
railhead that delivers production to the port of Santos.
In my opinion this just adds more pressure to the local soybean
prices which have dropped to about US$ 6.50 per bushel in interior
Mato Grosso.
Since the crop report soybeans have dropped US$ 1.50 per bushel in
Chicago.
Since the onset of full harvest prices have dropped US$ 2.50 per
bushel. |
This wide basis is
a trifecta of events.
-
Harvest hedge
pressure
-
Lack of storage
in Mato Grosso because of 1 million + tons of carryover 2nd crop
corn from 2009 winter crop.
-
Logistical
bottleneck at Alta Araguaia causing a delay with trucks being
unable to get back into the interior to pull production away from
local elevators.
These three things
a creating a situation allowing grain buyers to steal this years
crop at low prices. Farmers that have storage will try and wait this
out. |
They will try to
trade physical soybeans for 2011 crop inputs later in the year. The
trade might be better than trying to sell soybeans for cash in the
near future.
This is creating a
negative vibe for the balance of 2010.
Cash flows are
tight now and negative for 2011 with current dynamics.
Weather:
Temperatures
hitting 38C/100F in Central Brazil.
Very odd hot dry
streak for this time of year. |