South America Grains

Grain traders are watching a developing La Niña. What happens to production over the next two to three months will have a big impact on corn (ETF:CORN) and especially South American soybean production (ETF:SOY) . In the event of another U.S. bumper crop, such as we saw in the summer of 2017, and lagging global exports, it will take a significant weather issue in South America to get grains out of the doldrums. This is sometimes possible with certain La Niñas.

Subscribers who have purchased our newsletter service on Seeking Alpha will be getting a few tips pursuant to our feelings about weather’s bullishness (or bearishness) for grains in the weeks and months ahead. Will wheat prices (ETF:WEAT) come out of its long term bear market? When spring arrives, dryness in the Plains will have more of an impact as the crop comes out of dormancy. The global glut in wheat continues to haunt the market. But this could be a whole new ball game in late winter or early spring, especially if we see other weather issues develop in Europe or Russia.

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Argentina and Brazil

Argentina is expected to increase its soybean acreage this year. Changes to soybean export paces could help Argentine farmers. According to Commodity Basis, the major soybean growing states are Buenos Aires, Cordoba, and Santa Fe. The country accounts for 18% of the world’s soybean production. Although the nation exports only 7% of global raw soybeans, it’s the largest exporter of soybean oil and meal. In 2013, soybean meal was Argentina’s single largest export commodity, bringing in revenues totaling $10.7 billion, according to MIT data.

Brazil is the world’s #2 producer of soybeans, accounting for 30% of global production. The country has over 29 million hectares of land available for farming this crop. Brazilian grown beans have a higher protein content than those grown elsewhere, thereby fetching higher prices in international markets. In addition, they produce a significant quantity of non-genetically modified (non-GMO) soybeans which sell at a premium to the GMO variation. (Source:


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Dryness for Plains wheat is typical of La Niña. However, it will take weather issues next spring in other parts of the world boost wheat prices:

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