Charts of the day are....

.....soybeans, and if this first daily candle chart looks the same as yesterday's crude oil chart you're probably not looking at a coincidence.

Here's the weekly candle.
Meanwhile, the stock featured before as a reflection on the bean, Bunge (BG) continues its rally.

Argentina declares an agro state of emergency

May corn futures (courtesy CBOT)

Yesterday evening Klishtina signed the necessary papers to officially call the situation in Argentina an emergency and give financial breaks to farmers hard hit by the ongoing drought. Thus Argentina joins Uruguay in emergency status. Here is AP with last night's news and a second article dated Jan 23rd that gives good background on the situation.

Finally here's a link to a review of the CBOT corn trading yesterday. Just FYI.

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BUENOS AIRES, Argentina (AP) — Argentina's president declared an agricultural emergency Monday in the nation's breadbasket provinces, responding to a key demand by powerful farm organizations amid the worst drought in decades.

Cristina Fernandez told political and business leaders in a televised press conference that the decree will exempt thousands of farmers from paying various taxes for one year to help them confront what analysts estimate will be $5 billion in losses this yada yada continues here

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STROEDER, Argentina (AP) — Skeletons of livestock are piling up in the scorching sun of the Southern Hemisphere's summer as the worst drought in a generation turns much of Argentina's breadbasket into a dust bowl.

The nation's farm sector stands to lose $5 billion this year alone — a huge blow to the economy of Argentina, a top world exporter of soy, corn, wheat and beef — as well as to the government of President Cristina Fernandez, which faces billions of dollars in debt payments this year.

Wheat fields that once supplied flour for pasta-loving Argentines now resemble deserts, and spiny thistles are all that survive on cattle ranches in southern Buenos Aires province.

Nothing edible grows, said Hilda Schneider, a 65-year-old rancher who has lost nearly 500 cows to starvation.

"With the situation we're in now, without any harvest, there's nothing to do," said Schneider, one of 2,000 residents in Stroeder, a farming village suffering its worst drought since the 1930s. "We try to save the animals, which is the only thing we have left."

Nationally, there hasn't been this little rain in Argentina since 1971, according to yada yada continues here

Soybeans: The penny is starting to drop

H2O please, nice Mr. Farmer

I really wasn't kidding on November 6th. Brazil's soybean harvest was already in trouble this year due to fertilizer issues and my call that Argentina would soon announce problems turned out to be correct. And you might have missed this post on December 26th due to a hangover, but the soybean chart was already very interesting three weeks ago.

But now the key word down here is drought. Rather than link stories here, just go to Google, plug in the words "soybean, corn, drought, Argentina, Brazil" (or preferred combination thereof) and check out the action for yourself. Suffice to say here that in Argentina yesterday futures contracts were very heavily traded and rose sharply. India went limit up overnight.

Bottom line: Put the bean on your radar. It might develop into the story of 2009.

Chart of the day is............

.....soybean meal, January 09 futures, six month chart.

Everso everso quietly, soybean meal (and its other soyfriends, of course) have put together a very interesting end of year rally. We're now at a point where the mumbo-jumboists will point to resistances lines, overboughtness on RSI and Stochs, etc. Meanwhile normal people will look at the chart, think about dollar weakness, lack of fertilizers used in the first half of the growing season (phosphate and urea prices have dropped considerably in the last few weeks) and the non-record numbers expected by Argentina and Brazil (to name but two) this year.

You'd do well to watch the bean from here; maybe those enormous Chinese apartment blocks are empty, but the people who were about to move in still need to eat food wherever they're hanging. The last time I looked the world's population was still growing and the thought of that bubble bursting does not promote thoughts of peace on earth and goodwill to all.

Fertilizer issues, soya harvests and all that jazz

Here's a bloomie story on Brazil soya pasted as stands. Zero in on the highlighted para 2, people. This could become a big problem going forward. Watch Argentina come out with lower crop forecasts in the next couple of weeks, too.

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Brazil Cuts Soybean, Corn Forecast on Fertilizer Cost (Update1)

By Carlos Caminada

Nov. 6 (Bloomberg) -- Soybean output in Brazil, the world's second-biggest producer, will unexpectedly fall next year as farmers lack credit to buy more expensive fertilizer, the government said.

Soybean output will decline to between 58.4 million and 59.3 million metric tons, compared with 60 million tons this year, the Agriculture Ministry's crop-forecasting agency said today in an e-mailed report. The agency, known as Conab, last month forecast production to rise to between 60.1 million and 61.3 million tons.

The global credit crunch came as farmers in Brazil sought financing to finish buying fertilizers for planting this month. The lack of credit means some regions will cut planting, and the reduced use of fertilizers may trim yields, Conab said.

``Production costs are significantly higher during the planting season and there are difficulties to access credit,'' Conab said in the report.

Average soybean yields will drop 1.6 percent to 2.77 tons per hectare in next year's harvest, Conab said. A hectare is equal to 2.47 acres.

In the Center West, which accounts for half of Brazil's soybean output, farmers will reduce planting as much as 2.9 percent to 9.35 million hectares.

Corn production will fall to 54.3 million to 55.2 million tons, from 58.6 million tons, Conab said. That compares with the October estimate for a drop to 55 million to 56 million tons.

To contact the reporter on this story: Carlos Caminada in Sao Paulo at at ccaminada1@bloomberg.net

Last Updated: November 6, 2008 07:20 EST