Takeaway

The market's focus is now shifting to the South American growing season, where the presenter sees a bullish risk for soybeans. The speaker, Chip Flory, argues that a combination of dry weather in northern Brazil, the impact of El Niño, and high input costs could lower the Brazilian soybean crop to the mid-170 million metric ton (MMT) range, below previous expectations of the low 180s.

What the presenter said

• After the September crop production report, the entire marketplace will be looking at South America. [0:20]
• September 15 is the go-date for planting soybeans in most areas of South America. [0:27]
• The northern and north-central part of Brazil has turned dry. [0:44]
• The impact of El Niño on the South American growing season is going to be ultra important for the grain markets going forward. [0:51]
• There is talk of Brazil not expanding soybean acreage due to high fertilizer and fuel costs. [1:04]
• Fuel costs will impact Brazilian farmers even worse than US farmers due to their transportation needs. [1:17]
• The South American bean crop might be in the mid-170 million metric ton range, rather than the low 180 million metric ton range, with a downside bias due to El Niño. [1:30]

Trade ideas

• None stated. The presenter's view is bullish on soybeans due to potential production shortfalls in Brazil.

Levels and data cited

• Data: September Crop Production Report.

Risks and what would invalidate this

• Dry conditions in northern and north-central Brazil affecting soybean planting.
• The impact of El Niño on the South American growing season.
• High fertilizer prices impacting Brazilian farmers' acreage decisions.
• High fuel costs increasing transportation expenses for Brazilian crops.