Analysis Grains

Up to 8 million tons of soybeans have drowned

May 3, 2024 - Jurphaas Lugtenburg

In the Netherlands, we experienced local flooding last night and overnight. Players in the grain market are not particularly panicking about this. It's a different story with the severe weather affecting the south of Brazil. Entire fields of soybeans are underwater there. According to Amis, the growing conditions for grains in the Netherlands and Germany are not unfavorable. The new Crop Monitor contradicts observations from the field.

The May contract for wheat on the Matif closed €0.25 lower at €204.75 per ton yesterday. Grain prices were on the rise at the CBoT. Wheat increased by 0.9% to $5.85½ per bushel. Corn recorded a 2% increase, reaching $4.52 per bushel. Soybeans were the biggest gainer on the Chicago exchange, closing 3% higher at $11.90 per bushel.

Here in the Netherlands, we are locally dealing with water overflows. This pales in comparison to the heavy rainfall in the far south of Brazil. The province of Rio Grande do Sul has been experiencing continuous heavy rainfall for days. Yesterday, a dam collapsed under the heavy rain. The floods have claimed thirty lives, with sixty people still missing. The BBC reports that 15,000 people have had to evacuate their homes due to rising waters, and around 500,000 people are without electricity and clean water.

Source: NOAA

Necessity knows no law
In addition to the human tragedy, agriculture in Rio Grande do Sul is also severely affected by the floods. Estimates vary, but somewhere between 4 and 8 million tons of soybeans still need to be harvested in the area currently underwater. In the latest Wasde report, the USDA estimated the Brazilian soybean harvest at 155 million tons. Conab predicted 146.5 million tons. It is unlikely that all the soybeans still standing will be lost, but a significant correction to yield forecasts is probable. It's no wonder soybeans made a jump on the CBoT. Meanwhile, farmers are doing everything they can to somehow bring in their crops. 'Save what can be saved of the approximately 30% of soybeans that still need to be harvested' is the essence of the message below.

Amis has published the new Crop Monitor. The most striking aspect is that the Benelux and Germany are colored green, indicating favorable conditions for grains. This contrasts with reports of relatively extreme and persistent wet conditions in Northwest Europe. For example, the scientific bureau of the European Commission and the German cooperative association warned last month of disappointing grain yields due to unfavorable growing conditions.

Jurphaas Lugtenburg

Jurphaas Lugtenburg is a market specialist in onions, carrots, and commodities such as wheat, corn, and soybeans at DCA Market Intelligence. He combines his degree in business administration with a passion for farming.
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