Iowa farmer Matthew Kruse finds ideal weather spurred planting in Brazil but sees dry conditions in the December outlook.

Reporting from the family farm in Brazil, Kruse says the current crop condition is “very good.”

“Looking into this first week of December, there seems to be pretty adequate rainfall in in most major growing regions,” Kruse says, “Looking out further into December and out through Dec. 17th there is kind of a drying pattern in that northeast part of Brazil that begins to spill over and kind of extend into the Center West region like Mato Grosso and the state of Goiás.”

Though weather forecasts that far out don’t have high probability of being correct, Kruse sees possibility of a rally in soybeans if dry weather spreads during this critical growing period.

“We've been kind of dancing around bouncing off this support level in January beans at like $9.76 and we really need that support to hold,” Kruse says.

Weak real boosts Brazil’s profitability

A strengthening U.S. dollar and a weakening Brazilian real helps farmers in the latter country find profit. Government overspending in Brazil pushed the real to an all-time low: more than six reals per dollar.

“That’s actually probably more of a good thing for Brazilian farmers because soybeans are a globalized dollarized commodity,” Kruse says. “And so, they receive more in local currency for the soybeans than they would otherwise at a stronger currency.”

Though some might expect this profit opportunity to spur additional planting, Kruse says that window is closed.

The Kruse family farm in Brazil finished soybean planting on Thanksgiving Day, and his story is similar to others in the region.

“I don't think you'll see any major change in soybean acres because they're pretty much on the tail end of planting,” Kruse says.

More corn acres in Brazil?

Corn production, however, could be a different story.

The price rebound “could incentivize farmers here to want to maximize the second crop corn acres,” Kruse says.