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December 30, 2016

Growing Season Progressing very good in Mato Grosso, Brazil

After a very frustrating 2015/16 growing season caused by hot and dry conditions, farmers in Mao Grosso are very hopeful about their 2016/17 soybean crop. The soybeans were planted early and the weather has been very good from the start of the growing season. The early maturing soybeans (90-day maturity) are approaching maturity and a few fields have already been harvested.

The president of the local Rural Syndicate in the municipality of Sorriso is expecting the soybean yields in the region to return to historical average of 55 sacks per hectare (47.8 bu/ac). Sorriso is located in central Mato Grosso and it is the largest soybean producing municipality in Brazil with approximately 600,000 hectares of soybeans (1.48 million acres).

In their most recent assessment, the Mato Grosso Institute of Agricultural Economics (Imea) is estimating that the state will produce 30.5 million tons of soybeans which would be a new record production for the state. Imea is estimating that the domestic price of soybeans in Mato Grosso in March will be in the range of R$ 64 per sack or approximately $8.60 per bushel. Mato Grosso is the largest grain producing state in Brazil.

The cost of transporting the crop to distant export facilities is always a concern for farmers in the state, but those costs have been slowly declining as more of the production heads north to ports on the Amazon River and in northeastern Brazil. Highway BR-163 goes straight north from Mato Grosso to the Amazon River and more grain is being shipped north as the asphalting of BR-163 nears completion.

There are also plans to build a railroad straight north from Mato Grosso to the Amazon River as well. When these two transportation projects are completed, the majority of grain produced in Mato Grosso will be exported out of port facilities in northern Brazil instead of ports in southeastern Brazil. Shipping grain north out of Mato Grosso instead of south is expected to save approximately 40% on transportation costs.

If the weather cooperates and wet weather does not delay the soybean harvest, then farmers in the state will be able to plant their second crop of corn entirely within the ideal planting window which closes about February 20th. An early planting of the safrinha corn increases the chances of good corn yields as well. Therefore, combining the two crops, farmers in Mato Grosso are very hopeful it will be a successful growing season.