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January 17, 2012

Rain Delays Harvest in Mato Grosso and the Start of Soy Exports

Contrary to southern Brazil where ongoing drought concerns have resulted in lower soybean estimates, the farmers in Mato Grosso have just the opposite concern, too much rain. As the result of the wet weather, the soybean harvest in Mato Grosso is getting off to somewhat of a slow start.

According to the Mato Grosso Institute of Agriculture Economics (Imea), 1.2% of the state's soybeans were harvested as of last Thursday, which is only a small advance over the 0.4% harvested a week earlier. With more normal type of rainfall, the harvest should be in the range of 4-5% complete by mid-January. The harvest in the western part of the state is the most advanced with 3% of the crop harvested.

In fact, a ceremony marking the start of the soybean harvest in Mato Grosso had to be canceled last Friday due to heavy rains and the inability of the governor and the acting Minister of Agriculture to fly into the event which was scheduled to be held in the city of Lucas do Rio Verde in central Mato Grosso.

Farmers in the state are not only anxious to harvest their soybeans before the seed quality starts to deteriorate, they are also anxious to plant their safrinha cotton and corn crops as well. The first crop to be planted after the soybeans are harvested in western Mato Grosso is cotton and the cotton generally needs to be planted by the end of January. In central Mato Grosso most of the second crop will be planted to corn and the corn needs to be planted by about the third week of February, so there is still plenty of time to plant the corn.

Farmers in Mato Grosso who did not purchase their seed corn for the safrinha corn crop are now having difficulty locating enough seed corn to plant the anticipated record safrinha acreage. If they procrastinated, they will have to settle on their second or third choice of corn hybrids. It is estimated that there may be as much as 2.2 million hectares of safrinha corn planted in the state, which would be a record and 20% more than in 2010/11.

The relatively slow start in Mato Grosso is probably going to also result in a delay to the start of soybean exports from Brazil. In mid-December, it was estimated that the farmers in the state would have harvested approximately one million tons of soybeans by the end of the first week of January, but that did not happen. Imea is estimating that the state will produce 22.16 million tons of soybeans, so as of last Thursday, only about a quarter million tons of soybeans had been harvested. As a result, there will not be enough soybeans in position at the Port of Paranagua to start loading vessels that have already started to arrive at the port.

The start of the soybean export season will now depend primarily on the rainfall in Mato Grosso, but we can already say that it will not start as early as had been predicted.