While early, the trade is starting to place considerable interest in the upcoming South American production season.
At the present time, the U.S. Department of Agriculture (USDA) is predicting 2021-22 crops of 118 million metric tons of corn and 144 million metric tons of soybeans for Brazil and 57 million metric tons of corn and 52 million metric tons of soybeans in Argentina.
These are all considerable increases from this year as weather is expected to return to more normal patterns in both countries. These increases are needed by the global market to help satisfy an ever-growing commodity demand.
While improved weather is expected to elevate production in South America, expansion will likely be limited to Brazil. Brazilian farmers are forecast to increase their production area by 6% this year, almost double the historical increase we see in year-over-year growth.
Favorable returns and the need for added domestic production are leading causes for expansion in Brazil. Argentina and other countries don't have as much idle land to...