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Will South American reach record production?

The potential for a record corn and soybean crop in South America could put pressure on U.S. commodity prices. Rabobank’s Stephen Nicholson says the weather for Brazil’s planting and growing season was off to a good start, but conditions are getting drier.

“There’s dryness in Mato Grosso and more dryness in northern Argentina, though they’ve had some moisture,” explains Nicholson. “Our analyst in Sao Paulo says this weather pattern is the way the season started last year. We had good, early rains and then, the faucet shut off. I think that’s the concern we have moving forward and we have to watch every day, because this isn’t a done deal.”

Nicholson tells Brownfield U.S. producers can anticipate more volatility.

“If South America can produce a record crop, we’ll likely see downward pressure on prices as we go into 2023. From a producer standpoint, when there’s an uptick in the markets because weather isn’t good, that’s an opportunity for farmers.”

Brownfield interviewed Nicholson at NAFB Convention in Trade Talk.