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February 5, 2019

Brazil Soybean Crop 21% Harvested vs. 5-Year Average of 8.6%

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The weather last week in Brazil returned to a familiar theme - scattered showers with uneven distribution and hotter than normal temperatures. A lot of central Brazil had good rains two weekends ago, but the rainfall amounts returned to below normal levels again last week. The forecast for this week is calling for much improved chances of rainfall across central Brazil and generally dry conditions in southern Brazil. The rainfall this week could be the best in quite a while in central and eastern Brazil.

This has been the pattern for the Brazilian summer rainy season thus far - episodes of showers followed by extended periods of hotter than normal and dryer than normal weather. With the exception of maybe western Mato Grosso and southern Rio Grande do Sul, virtually every place else is reporting below normal rainfall thus far for this growing season.

The Brazilian soybean harvest is moving along at a record pace. According to AgResource, Brazilian farmers had harvested 21% of their 2018/19 soybean crop as of last Friday compared to 6.4% last year and 8.6% for the 5-year average. The fastest harvest is in Mato Grosso with 44% of the soybeans harvested followed by Mato Grosso do Sul at 29% and Parana at 24%.

With 21% of the soybeans in Brazil harvested, that means that approximately 40-45% of the crop is turning yellow. Once a soybean plant starts to turn yellow, there is no more potential increase in yield because from that point forward, the seeds start to lose moisture. Therefore only 50% of the soybeans or less could be helped going forward if the weather pattern would shift toward increased rainfall. Improved rains from this point forward might "stop the bleeding," but I do not think it would result in a revision upward of my estimate.

Mato Grosso - According to the Mato Grosso Institute of Agricultural Economics (Imea), the soybeans in Mato Grosso are 37% harvested (AgResource is 44%) compared to approximately 20% for last year and the 5-year average. The soybean harvest in the state advanced approximately 12% last week. The most advanced harvest is in western Mato Grosso where 51% of the soybeans are harvested with the slowest being northeastern Mato Grosso where 16% of the soybeans have been harvested.

Parana - After seven straight years of good harvests, the soybean yields in the state of Parana will be down this year. The hardest hit area of the state was western Parana, but in northern Parana the early soybean yields have been disappointing as well. The Department of Rural Economics (Deral) is reporting that farmers in northern Parana had been expecting their 2018/19 soybeans to yield in the range of 3,300 to 3,700 kg/ha (48.8 to 54.7 bu/ac), but the hot and dry weather during December and early January has reduced that to a range of 1,950 kg/ha (28.8 bu/ac). The later planted soybeans are expected to yield somewhat better.

In the municipality of Marechal Candido Rondon, which is located in far western Parana just across the Parana River from eastern Paraguay, the region was basically dry from the end of November to early January. The soybeans are 95% harvested and the yields are in the range of 16 to 20 sacks per hectare (14 to 17.7 bu/ac) compared to prior years when they averaged 61 to 66 sacks per hectare (54 to 58.6 bu/ac).

In addition to lower yields, farmers are also complaining about the higher cost of production in 2018/19. The price of seed, fertilizers, and chemicals were all higher this year as well the cost of freight. The freight costs alone increased approximately 30% with the implementation of a minimum freight rates imposed by the government.

The cost of producing soybeans in northern Parana is estimated at 45 sacks per hectare (40 bu/ac) if you own your land. The cost of rent is approximately 12 sacks per hectare (10.6 bu/ac). As a result, to make a profit on rented land, the soybean yields need to be in the range of 60 sacks per hectare (53.2 bu/ac).

Mato Grosso do Sul - Technicians from the consulting firm Agroconsult recently toured the states of Mato Grosso do Sul and Goias and they reported that he soybean yields in those two states were highly variable. In northeastern Mato Grosso do Sul, farmers at the start of the growing season expected their soybeans to yield 70 to 80 sacks per hectare (62 to 71 bu/ac), but initial yields are more in the range of 50 to 60 sacks per hectare (44 to 53 bu/ac). Some of the farmers that were especially hard hit by the hot and dry weather are reporting yields as low as 40 to 50 sacks per hectare (35 to 44 bu/ac).

In Sao Gabriel do Oeste, which is located in northern Mato Grosso do Sul, 10% of the soybeans have been harvested and average yields are expected in the range of 45 to 52 sacks per hectare (40 to 46 bu/ac) compared to 65 sacks last year (57.7 bu/ac). The yield variability is tremendous from 20 to 80 sacks per hectare (18 to 71 bu/ac).

Goias - The situation in Chapadao do Ceu in southwestern Goias is even worse. This region had two periods of dry weather during the growing season. During the month of December, the region basically went 30 days without rain. They then received some limited rains around the first of the year, but they then endured another 15 days without rain during January. During both of these periods, the temperatures were very hot.

This region is generally very productive with soybean yields as high as 70 bu/ac, but this year, some farmers are reporting losses as high as 50% especially for the early maturing soybeans that were filling pods in December.In the municipality of Mineiros, which is located in southwestern Goias, the soybean yields are in the range of 48 to 50 sacks per hectare (42.6 to 44 bu/ac) compared to 60 sacks per hectare (53 bu/ac) at the start of the harvest last year.

The president of the cooperative Comigo in southwestern Goias indicated that their 7,700 members are anticipating soybean yields in the range of 56 to 60 sacks per hectare (49.7 to 53.2 bu/ac), which would be about 10 sacks per hectare (8.8 bu/ac) less than last year. The cooperative's membership plant approximately 40% of the all the soybeans in Goias and they have harvested 18% of their soybeans compared to 10% last year at this time.

Minas Gerais - The soybean harvest is just getting underway and early yields expected to be down 15% to 20% due to hot and dry conditions during December and January. Yields are expected in the range of 50 to 55 sacks per hectare (44.4 to 48.8 bu/ac). Later maturing soybeans hopefully will yield better.

Rio Grande do Sul - According to Emater/RS (the Extension Service), the soybeans in Rio Grande do Sul are 20% in vegetative development, 42% flowering, and 38% filling pods. The soybeans are rated in good condition in the northern part of the state, but there has been too much rain for the soybeans in the southern part of the state, which accounts for approximately 18% of the state's soybean acreage.