Recent floods in Brazil could impact the markets for years to come.
Entire farms have been destroyed, wiping away millions of pounds of soybeans, as well as equipment to replant them. USDA reports around a million metric tons of soybeans have been lost in Rio Grande do Sul.
Brokers at StoneX say that it could actually be much worse than originally thought.
Tractors and trucks have also been swept away, keeping farmers from planting previously anticipated wheat. Wheat output in the area was already expected to come in around 4% lower this season.
Biodiesel production is also impacted there, as trucks are unable to make deliveries.
In response to high waters, the Rio Grande Port Authority has reduced the allowed ship drafts for grain terminals. On a normal day, the draft is around 45 feet. It has been reduced to less than 42 feet.
Around 300,000 tons of soymeal and 854,000 tons of soybeans are waiting to be shipped from the area.
