Sep 15, 2009
Corn Planting Starting In S.A., Soy Planting Starts Today In Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
South American farmers are just starting to plant their 2009-10 corn crops. In Brazil, less than 10% of the corn has been planted and in Argentina approximately 5% of the corn has been planted. The corn acreage is expected to decline in both countries as those acres are switched to additional soybean production. Soybean planting will start today in central Brazil with the expiration of the 90-day soybean free period.
Estimates for corn acreage in Argentina continue to decline despite efforts by the government to encourage corn production. Continued dry weather in central and northern Argentina is not conducive for early corn planting. Additionally, farmers in Argentina view corn as a much more risky proposition compared to soybeans. Corn is more expensive to plant and it requires better weather during the growing season to reach top yields. The farmers also believe that the government will manipulate the corn exports in order to hold down domestic inflation. This manipulation in the past has resulted in the farmers not being able to forward sell their crop because no one could determine what a future price might be. Soybeans do not have this problem because the government does not manipulate the soybean export market (other than the fact that they charge a 35% soybean export tax), so farmers are better able to determine what a future soybean price might be.