South American crop Production Monitored
A seasonal shift is taking place in the market that is putting more interest on South American weather conditions and outlooks than on the U.S. conditions.

The trade is projecting large crops in Brazil this year with corn at 125 million metric tons and a soybean crop near 155 million metric tons. These would both be sizable increases from this year’s crops, especially on soybeans.

A 4% to 5% increase in planted acreage is the primary reason for the elevated production, but so is weather, which raises some questions.

The most uncertainty on South American production is how long the current La Nina system will be in place and if it will impact yields for a third consecutive year.

Current models show La Nina lasting at least through this fall, which...