Brazilian Agriculture at a Crossroads: The Impact of Extreme Weather on Soybeans

Unraveling the Unprecedented Drought in the North and Excessive Wetness in the South.

May Soybeans

Corn COT is in a buy signal (we still need to see the price moving higher to enter the trade. However I do like corn and wheat. I just need the entry signal)

Reasons to Consider Soybeans as a Buy:

1. COT Behavior: Current observations of COT behavior indicate a favorable outlook for soybeans.

2. Technical Patterns: Analyzing the present technical patterns suggests a positive trend for soybeans incoming.

3. Climate/Fundamental Variables: Examination of climate and fundamental variables, including the impact of rains in the Northern Half of Brazil, supports a potential buying opportunity.

4. Seasonality: Considering the seasonality factor, soybeans exhibit promising prospects.

   

5. Regional Weather Patterns: Despite talks of brief respite with anticipated rains in Northern Brazil, the absence of significant signs of the Amazon monsoon firing up suggests that the current weather pattern is not undergoing a substantial change.

6. Replanting Requirements: The necessity for a major replanting for soybeans and first crop corn in Central West Brazil (affected by the Mato Grosso drought) and South Brazil (facing excessive wetness) underscores potential disruptions in crop production.

7. Farmers' Dilemma: The crucial decision-making process faced by Brazilian farmers—whether to replant soybeans, opt for more drought-resistant crops like cotton, or leave the ground fallow and risk planting second crop corn—creates uncertainty in the agricultural landscape.

8. Unprecedented Weather Extremes: Unprecedented drought in the North and extreme wetness in the South of Brazil, coupled with the failure of the Amazon rainforest/monsoon to arrive by mid-November, contributes to a unique and challenging scenario.

9. Historical Crop Preferences: In past dry and hot seasons, Brazilian farmers have historically leaned toward replanting cotton rather than corn or soybeans, reflecting a distinctive regional agricultural preference.

10. Crop Potential Jeopardy: The culmination of these factors suggests that the Brazilian crop potential, especially for soybeans and corn crops are under significant threat this growing season.
    
    

    How are we positioned to take advantage of this?