<\/p>\n<\/a>Grains<\/u> –
\nIt seems every other newswire article I see these days discusses the Brazilian road problems on the way to ports in the north.\u00a0 There seems to be some consensus thought process that this is a YUGE problem and the US could potentially see an increase in export business due to these logistical snafus.\u00a0 Well, for starters we need to acknowledge that just because Brazil is harvesting their crop is doesn\u2019t mean US sales just stop.\u00a0 Of course we\u2019re going to be picking up cargoes of sales here and there.\u00a0 Still, the market is concerned, so let\u2019s look at the math.<\/p>\n
The most recent article I\u2019ve seen notes \u201cabout 1,500 trucks loaded with soybeans, of a total of 2,500 trucks, are halted\u201d along the route.\u00a0 On second thought, however, these numbers don\u2019t sound exclamatory enough so I\u2019m just going to make up something…we\u2019ll say 5,000 trucks of soybeans are halted on the route. Depending on who you ask, each truck probably holds 40-50 mt of soybeans, but again let\u2019s just say 55 mt to be aggressive.\u00a0 Here is the math\u2026 5,000 trucks x 55 mt = 275,000 mt.\u00a0 Again depending on how you want to work your math, that\u2019s roughly 5 cargoes.<\/p>\n
Does the market really want to throw a fit over 5 cargoes?\u00a0 Apparently it does.\u00a0 I\u2019m not saying these articles are responsible for the strong price action (you can mostly thank Fund Bro for that) but they surely don\u2019t hurt.\u00a0 Still, we\u2019ll get official Feb export data probably today and it is likely to show ~6 mmt of soybean exports which would be a new record for the month.\u00a0 That would imply to me that the new crop export program is running smoothly overall, unless of course you\u2019re the poor sap paying demurrage on a theoretical 5 cargoes in the north because you were counting on a bunch of trucks full of soybeans traveling through the rainforest on dirt roads.<\/p>\n
The chart below shows a breakdown of soybean shipments by port in January of this year.\u00a0 The two northern ports represented here are Itacoatiara and Santarem.\u00a0 These comprise roughly 8% of Brazil\u2019s total soybean shipments.\u00a0 Again, I\u2019m not sure why this is such a popular story considering the south is running smoothly.<\/p>\n
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