Tidbits
Corn was hit hard yesterday by the expected increase in 2025 acres, improved weather in South America, and first notice day for deliveries on March futures, all of which is old news. Improved weather for soybean harvest means more safrinha corn will get planted and Argentina’s dry areas will get a drink, but that does not change the fact the world is short of corn. After Friday’s price decline, we were surprised to see corn so weak yesterday.
Soybeans traded to the bottom of its 6 week trading range for the same reason as corn except the acres. With the combines rolling in Brazil, it was a bit surprising beans were not weaker than they were.
The Brazilian currency was sharply weaker yesterday which also pressured both corn and beans. When Brazil’s currency is weak, their commodities are less expensive to foreign buyers. Cheaper corn and bean export offers from Brazil make U.S. commodities less competitive and pressure U.S. prices. As we explained last week, their currency had gained 9.7% versus the U.S. dollar from 18 December to 18 February. That made their commodities more expensive for foreign buyers and made U.S. commodities more attractive to those foreign buyers. Note that 9.7% on $10 beans is 97¢!
Yesterday, Brazil’s currency exchange rate versus the dollar made Brazil’s beans 7¢ cheaper and bean futures were down 8 to 10¢. Brazil's farmers lost 1 to 3¢.