Don’t believe the hype about Brazil being dry as soybeans are seeded, AgResource Brazil analyst Pedi Dejneka said.
“Planting is going just fine in Brazil,” he said.
Dryness today has little effect on how crops turn out, Dejneka said. It’s not critically dry, and although the dryness is pushing back seeding it is unlikely to affect yields.
Good weather could help Brazil produce 96.2 million tonnes of soybeans when they are harvested early in 2015. Poor weather could bring 88.9 million tonnes.
Extremely good weather could bring more than 100 million tonnes, and very bad weather less than 86 million.
The recent incredible rally in soybean meal futures makes Analyst Bill Tierney of AgResource bearish about that commodity.
When he wrote his presentation for Cereals North America he was bearish soybean meal.
In the six days from the time of writing to when he delivered the speech, soy meal soared.
So from those levels there is even more downside price risk.
“The statement today would be, ‘much, much more downside.’ ”
That means soybeans have a bad outlook, too.
Tierney said canola should be better off because it is oil-based in pricing, and world vegetable oil prices appear stable for the winter.
“I don’t see a lot of downside potential in veg oil prices,” he said, noting how hard they had been already “pounded down.”
“I don’t see anything in the cards right now to support a substantial rally in veg oil prices.”
It should be warm across Canada this winter, warm in the United States and warm and wet in Europe.
Scott Yuknis of Climate Impact Co., predicts warm northern Pacific and warm Atlantic water holding back the kind of brutally cold temperatures from the north that hit much of North America last winter.
“The theme here is warming,” said Yuknis. “It’s almost the opposite of what happened last year.”
AgResource president Dan Basse predicts a slump in farmland values but not a repeat of the financial crisis that beset farmers in the 1980s.
Then, farmers had high debt levels and high interest rates. This time, farm debt is manageable and interest rates are low.
Basse expects a farmland price decline to take three to five years, with evaporation of profitability prompting lenders to hold back farmers from bidding on more land.
Mark Hemmes, president of Quorum Corp., said cold weather will bog down the western Canadian rail system every winter until new technology replaces air brakes. It currently takes hours to get enough pressure into air brake systems of long trains in frigid conditions.
New technology is not expected soon, but many improvements are happening within the Canadian rail system, he said.
One railway is getting ready to start running 112 car shuttle trains, like those that run from the U.S. Great Plains to port.
- Winter: Temperature average near to slightly above normal and precipitation is near normal
- Spring (March-May) 2015: Wet across the southern Prairies
- Planting season (April –June): Warm
- Summer: Unusually cool across Saskatchewan, Manitoba Ontario