Katie Geerdes

Brazilian farmers are in the thick of the 24/25 growing season.  Planting is virtually over and now they focus on top dressing potassium while scouting fields for insect pressure.  My Brazilian uncle who farms across the road from us says his crop is off to a good start.  He said it has leaned a bit drier this past week but that is not a bad thing.  He said last year there was a week or two of dryness after planting that helped the beans establish their roots, sending them deeper into the soil.  He believed this helped give him one of the best crops they have ever had last year.  That is why he looks at any short-term dryness as a good thing.  The forecast shows rainfall returning later this week in our region of Minas Gerais.   Rainfall forecasts show plenty of precipitation in Southern Brazil, especially in the state of Parana where they could see up to 6" this week.  Mato Grosso do Sul, Goiás and Minas Gerais will see scattered showers of 2" to 3".  Our attention is drawn to the northern half of Mato Grosso which leans drier for the next week or two.  There will…

The 2024 presidential and congressional election results unleashed a surge of optimism in the Ag sector. Maybe this was relief fueled over what will not happen relative to higher taxes and regulation. This burst of elation may or may not last but it suggests that the Ag sector was pleased with the election outcome. They look for favorable tax and regulatory treatment from the GOP victory. They do not appear to be concerned over labor, trade and tariff threats but that comes in 2025. The Perdue Commercial Producer survey jumped as a measure of optimism was recorded   I think that banker sentiment in January and the change to what occurred post-election was notable. The overall sentiment started the year cautious and weakened into October. The recovery in sentiment from 35.2 in Oct to 50.2 in November showed the highest optimism of the year to date. Bankers were reportedly dancing in the street over the prospects of financial deregulation. They never seem to get around to brokerage deregulation so we could dance too. Changes in perception of loan volume, deposits and CDs is their business. The year saw banker optimism for farmland prices start out strong at 64. Looking at…

Russia walks, talks and projects itself to be a much larger profile than it is to cast a larger-than-life shadow. Vladimir Putin is fixated on the Russian past when it was an empire and later the Soviet Union which he revered. He thinks he can resurrect the past in the future with the use of intimidation and military power and instead is presiding over its demise. The reality is that Russia is a pretty pathetic country by any metric except its belligerent attitude and willingness to sacrifice its young in the cause of resurrecting an empire. Russia has caused decades of conflict that has cost the US $trillions to defend. US military expenditures reflect the perceived threats to our national security. Russia has often occupied the position of being the top threat so has strained our Treasury in the necessity of countering it. The demise of the Soviet Union was caused by economic collapse. This has gone on literally my whole lifetime. I was born in 1952 and it was 1953 before my father saw me as a baby for the first time as he was stationed in Germany serving in the 4rth Infantry Division in one of those geographic…

December has a seasonal history of being a bullish month for soybean futures, but buyers did not gain much traction this week. Bearish technical traders were still in control as they attempted to break the contract lows. Meanwhile, fundamental views continued to lean negative around inputs including fresh tariff threats, growing pessimism about the direction of biofuels policy, and record-large crop potential in South America. Are these headwinds so stiff as to negate the usual end-of-year price bump that market participants have come to expect out of soybeans and many other commodities?   Seasonal data from Moore Research highlights a strategy for buying January soybean futures that was profitable from December 1 - 18 in the past 13 out of 15 years. Zooming out for the whole month, soybean futures have trended higher throughout December in all of the previous 5-, 15-, and 30-year timeframes. While not as historically robust as for soybeans, the December patterns also lean friendly for corn and wheat futures.   One unique feature of the present December is that there are virtually no major weather concerns in South America to keep track of. Growing conditions are widely favorable in Brazil and Argentina at the moment,…

Mexico needs to celebrate its participation in the USMCA and needs to hurry as it is likely coming to an end soon. DJT has had it in for Mexico having expressed no interest in building a resort and golf course there. He has effectively used Mexico as the fall-guy to advance his political agenda. In most ways Mexico is guilty as charged. Once upon a time Mexico was bleeding its citizens northward across our southern border who were funding the home country by sending remittances home each month. "2024: Remittances are estimated to reach over $65 billion by the end of the year. The average amount of each remittance is around $390, and the average recipient receives money from relatives abroad about seven times per year. 99% of remittances in Mexico are delivered digitally." As time passed, Mexico became an auxiliary to US supply chains who began relocating to Mexico rather than entice Mexicans into coming to the US. As job opportunities grew in Mexico, the flow of Mexican workers northward first slowed and then that changed and changed again. Now they have been replaced in border apprehensions by immigrants from other Central American countries seeking asylum and the dream here. Mexico…

I am back in Brazil. I haven't had a proper crop tour yet but what I saw from the drive from the airport looked fantastic. The soybeans were ankle high already, and very uniform. If anything, they looked a bit starved for sunlight. I see traders and analysts looking for any possible sign of dry weather to put a dent in the crop, when in fact a week of sunlight might actually do it some good. Southern Brazil and Argentina are drier going into this week but that appears to be short-lived. It will give them a chance to dry out and set their roots while allowing planting to get wrapped up. Mato Grosso do Sul and Parana see solid rainfall the middle of this week and that continues to spill over into neighboring states to the North. The Northern tier of Brazil should see 2" – 3" this week. Heavy rainfall comes back to RGDS and parts of Argentina this weekend with many areas seeing up to 6".   Long term weather anomalies still show wetter than average weather through the first week of December, but we do notice that a pattern of below average rain begins to expand…

DJTs tariff threat is just another brick laid on Canadians who are already struggling under the weight of 907.185 kilos (ton) of them. US consumers responded to inflation as the top concern in our election and Canadians have responded similarly. Prime Minister Justin Trudeau has just a 33% approval rating which is worse than Biden's at 36%. We frequently talk to Canadians and their ire toward Trudeau is something that they all agree on. Things Canadians are worried about are not much different than what concerns Americans. They are focused on high rents and food prices. Canadian food prices have gone up 37% more than US food prices. They have a national health care system and yet 45% of Canadians express strong concerns over it. The average Canadian makes $22,000 less annually than the average US income. That makes labor costs cheaper in Canada. Home purchases and rent in Canada is twice as unaffordable as ours. The average Canadian income would not cover the cost of buying a home. More Canadians then are forced to rent, forcing rents higher. In 2023, the total value of trade between the United States and Canada was $774 billion, with the U.S. importing $421.1 billion…

Brazil's growing conditions remain ideal as we approach the end of November. While dry pockets were beginning to form in Southern Brazil last week, forecasts allow for solid precipitation of up to 4", eliminating any concern for crop stress. Argentina will see the heaviest rainfall with areas of up to 6". The northern tier of Brazil will see 1.5" to 4" falling later in the week. Temperatures look to be at or below normal. We estimate roughly 90% of the soybean crop will be planted by this weekend. The remaining 10% will fall in some of the fringe areas in northeast Brazil as well as Rio Grande do Sul. Our family farm in Minas Gerais is roughly 85% planted and should wrap up later this week.   Brazil continues to ramp up corn ethanol production. Currently, there are at least 12 "full" corn plants in Brazil in operation with another 10 "flex" plants. (Flex plants use sugarcane for feedstock half the year and then use corn the other half). According to Banco Itau, they have identified another 22 plants that are either being constructed or in the blueprint phase. This would effectively double the production capacity in Brazil. It seems…

DJTs rejection of globalization and free trade policy, soon to be replaced by an "America First" trade and foreign policy, is not a threat or negotiation ploy. It is real and about to be implemented in 2025. The world relationship as we have come to know it, post WWII, is about to undergo a material change. The opportunity that the US has given geopolitical allies to ride on our coattails as equal partners is over. The opportunity for allies to roll forward in the US orbit and be protected by the US policing the world order is over. This relationship was not one-sided as the US received great benefits as well. The US is the center of the world economy and without access to our markets or our security pledge to include trade partners under our umbrella of protection, it is about to undergo changes that will reorder the world trade-wise. It will geopolitically fragment into smaller zones of influence and self-interest. DJT is going to create an America First and foremost entity and will sell the benefits of the American alliance going forward to former and new allies for a fee. Even traditionally close allies and those who share…

Friday was another session where grain traders had most of their focus locked on the continued tumble for soybean oil futures. After just testing the calendar year highs less than two weeks ago, the nearby soy oil contract has since dropped over 15 percent. Much of the soy oil loss was led by lower palm oil prices, which involved uncertainty about export demand and about the outlook for biodiesel production in Indonesia and Malaysia. There was related negativity about the potential direction of renewable fuels policies here at home as well, but that bearishness was balanced against the surprising surge in U.S. soy oil exports.   A big part of the current soybean oil story starts with the bearish outside reversal that futures suffered on November 11th. Soy oil futures reached a new six-month high early on that Monday session before traders went for the exit once they heard about President Trump selecting Lee Zeldin for head of the Environmental Protection Agency. Fast forward to this last weekend, the soy bulls were further spooked by the choice for oil company CEO Chris Wright to lead the Department of Energy. Zeldin was noted not necessarily for being against renewable fuels but…