December 11, 2013

Crops are Developing Well in Rio Grande do Sul

Most of the news out of Brazil usually involves the crop development in the two largest producing states of Mato Grosso and Parana so let's take this opportunity to look at the third largest producing state of Rio Grande do Sul. The state is the third largest producer of soybeans, the largest producer of wheat and rice, and an important corn producer as well.

Soybeans - According to Emater, which is the extension service in the state, the soybeans in Rio Grande do Sul are approximately 80% planted with some regions of the state such as Passo Fundo over 90% planted. The crop is in vegetative development and the condition of the soybeans is rated good with few cases of disease or insect infestations. The remaining soybeans to be planted will be double cropped after the last remaining wheat is harvested.

Conab is estimating that farmers in the state will plant 5.4% more soybeans this growing season and the production will increase 5.4% to 13.2 million tons.

Corn - The corn crop in the state is 85% planted with 42% in germination/vegetative development, 25% pollinating, and 18% filling grain. The weather thus far has cooperated and the crop is rated in good condition. The wide range of crop development is typical of the corn crop in southern Brazil. Most commercial corn producers in the state like to plant their corn as early as possible to take advantage of the premiums usually offered for the first harvested corn in the state, but many small family farmers that only use the corn to feed their livestock, tend to stretch out the corn planting over a longer period of time.

The average price for corn in the state last week was R$ 23.50 per sack or approximately US$ 4.60 per bushel and most of the corn currently being sold in the state has been brought in from Mato Grosso where corn is selling for about two dollars per bushel less. The price differential is the result of transportation costs between the two states.

Conab is estimating that the corn acreage in the state will increase 0.7% and the total production will increase 0.7% to 5.4 million tons. All the corn production in the state is full-season corn since the weather in the state is too cold for safrinha corn.

Rice - The rice crop in the state is 97% planted and the crop has not encountered any difficulties this far and is rated in good condition. Virtually all the rice produced in the state is flood-irrigated and most of the crop is still in vegetative development, but some of the earliest planted rice is entering its reproductive phase. Conab estimates that the rice acreage in the state will increase 4.7% and the total production will increase 5% to 8.3 million tons. Rio Grande do Sul is responsible for approximately 68% of Brazil's rice production.