{"id":1912,"date":"2017-03-08T08:35:33","date_gmt":"2017-03-08T14:35:33","guid":{"rendered":"http:\/\/www.ctsfutures.com\/?p=1912"},"modified":"2017-03-08T08:35:53","modified_gmt":"2017-03-08T14:35:53","slug":"morning-thoughts-2017-03-08","status":"publish","type":"post","link":"https:\/\/udg.ehs.mybluehost.me\/morning-thoughts-2017-03-08\/","title":{"rendered":"Morning Thoughts – Mar 8"},"content":{"rendered":"

<\/a>Grains<\/u> –
\nThe WASDE report is due tomorrow afternoon and we\u2019ll cover expectations for that here tomorrow.\u00a0 Today, however, I want to briefly cover tomorrow\u2019s other<\/em> important release which will be Conab\u2019s update on production estimates.\u00a0 For your review I\u2019ve posted last month\u2019s recaps here.<\/p>\n

\"CONAB<\/p>\n

\"CONAB<\/p>\n

By now you\u2019ve likely seen several newswire reports continue to push Brazilian soy production estimates higher.\u00a0 Estimates I\u2019ve seen so far this week range from roughly 107-109 mmt, compared to last month\u2019s Conab estimate of 105.6 and WASDE\u2019s last estimate of 104.0 mmt.\u00a0 Also note the average guess for WASDE\u2019s revision tomorrow is \u201conly\u201d 106 mmt.<\/p>\n

Below I\u2019ve plotted a history of Brazilian soybean yields as reported by Conab.\u00a0 For 16\/17, I\u2019ve plotted the yield that would be necessary to achieve a 107 mmt crop using Conab\u2019s last area projection.\u00a0 As you can see, this would be a new record yield, which might lead some to think the high end of these recent projections is overly-optimistic.\u00a0 However, note that it is just barely a new record and also note it really isn\u2019t that much above the trendline plotted on the chart.<\/p>\n

It seems we\u2019ve heard a lot of talk in US circles about a \u201cnew paradigm\u201d on soybean yields lately, but for some reason we\u2019re not yet translating that into our yield projections in South America.\u00a0 This past\u00a0 year\u2019s US soybean yield was roughly 11% above the linear trendline…what would a Brazilian yield of 11% above trend equal?\u00a0 Based on my rough math that would come in roughly 115-116 mmt.\u00a0 Please keep in mind I\u2019m not sitting here trying to forecast such a crop, but I\u2019m merely pointing out that based on our recent US experience, we might not have learned our lesson in projecting South American yields.\u00a0 I think an expectation +\/-107 mmt from Conab tomorrow is a pretty good bet, but I honestly wouldn\u2019t be too surprised with something higher.<\/p>\n

\"Brazil<\/p>\n

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