Argentina’s Wheat Planting Falls Behind:
Growers in Argentina are projected to plant 5.4 million hectares of wheat in 2017/18 or 1 million less than in the 2016/17 season. With the planting window closing in August, growers will struggle to finish up planting if the forecast for heavy rainfall over the next two weeks holds true. Any unplanted acres will likely roll over to the upcoming soybean season. We will likely see a couple hundred thousand hectares subtracted from wheat production and added back to soybean production. We therefore suggest that traders watch daily precip levels in Gro to track the potential weather impact on wheat acres in Argentina.
US Corn Harvest Starts in the Gulf States:
The percentage of corn that reached maturity in Alabama, Mississippi, and Texas last week was 49%, 50%, and 40%, respectively. Although corn production from these Gulf states accounted for only 4% of 2016 US production totals, it also boasts the best condition ratings in the nation this season. Given problems for US corn elsewhere, growers from these states will have a jumpstart on capturing export demand. We recommend that agribusiness companies closely watch how weekly harvest progress impacts export prices at the US Gulf.
A Beetle Plague Will Push Coffee Prices Higher:
An army of invasive berry-borer beetles has spread across Brazil’s key arabica coffee growing regions in recent months. The country is contending with the worst infestation since 2013, according to Epamig, Minas Gerais’ agricultural research arm. The uncontrolled spread of the pests is being blamed on Brazil’s ban of endosulfan, an effective insecticide. We anticipate that the rise in arabica coffee futures has just started. Beverage companies starting to hedge should prepare for additional cost inflation.