Fundaments matter most

By Guilherme Signorini, The Ohio State University Department of Horticulture and Crop Science

The importance of fundamental analysis became clear in the past South American grain season. Around November 2023, the Brazilian and American agencies (CONAB and USDA, respectively) were overly optimistic with their projections for Brazil’s 2023/24 grain crops despite obvious evidence of weather challenges at planting. Those who followed our articles through the South American Crop Update knew that the official projections were not quite right for the reasons analyzed and reported here. While it was not surprising to us, the USDA saw Brazil’s realized soybean and corn production fall below their original predictions by about 10 and 7 million metric tons (MMTs), respectively. CONAB numbers were not much better, with a gap of 15 MMTs for soybeans and 4 MMTs for corn. Converting the USDA forecasted-minus-realized gap to usual measurement units, it is like getting the Brazilian soybean production wrong by 1.3 times the 2023 Ohio production.… Continue reading