One thing traders and buyers always need to know is how fast the crops are being marketed. Are the farmers holding their crops, or are they actively selling? In times with very low prices, of course, they’re going to hold it in the hope that prices improve in the future. How much of the crop that is being moved into the market right now, however, is something that is not as readily available in South American as in the United States.
A few decades ago, it was nearly impossible to get marketing information from Brazil. No one knew what was being produced or marketed. Today, there still are very few sources for such information. Very few U.S. firms have the experience, expertise or language skills, and boots-on-the-ground, to provide the needed intelligence.
New technologies – like hybrid seed or precision agriculture – that carry the promise of increasing yields and production can alter the supply end of the marketing equation. The ripples can run right up through the agribusiness sector to have an impact on stock prices for companies with effective, hot new technologies. This can be of particular interest to equities trading companies.
Likewise, such technologies as genetically modified organisms – that is, genetically engineered animals or plants — can complicate marketing. Major markets like Europe and China oppose GMO grains, for instance. That requires a complete separation of the GMO and traditional marketing channels. Any presence, however small, of genetically altered food in a shipment can cancel the entire sale. In general, the Brazilian government has been more cautious than U.S. government about releasing crop varieties that are not yet approved by major consumers.