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January 20, 2011

Brazil Soybeans to be Harvested in More Narrow Window

Frequent showers in Mato Grosso have resulted in a slow start the 2010/11 soybean harvest. Imea reported that less than 1% of the state's soybeans have been harvested, which is behind last year's 3% harvest pace. With a near term forecast calling for continued wet conditions, the harvest pace will continue to be slow until the weather turns dryer. With each passing week, more and more of the crop in the state will mature and it appears that the soybean harvest in the state will be concentrated more than normal during the month of February.

This is not good news for the soybean producers in Mato Grosso. In addition to increasing the risk of lower quality seed due to extended wet conditions, the fact that the harvest is going to be concentrated in a shorter window means that freight cost could spike higher than what is already expected. The trucking companies in the state have already announced that freight rates will increase at least 10% this harvest season. If the soybean harvest is more concentrated than usual, there will be a shortage of trucks and freight rates could increase even more than 10%.

Parana is the second leading soybean producing state in Brazil and soybean harvesting in the state is expected to begin within two weeks. The full season corn crop in Parana is also approaching maturity and the first corn fields will also be ready for harvest within two weeks.

Generally the crops in Parana are rated in good condition, but there are a few isolated areas in the western part of the state between the cities of Cascavel and Foz do Iguacu where it was dry for about two weeks in the middle of January. The early corn harvest is already underway in northwestern Rio Grande do Sul.

Wet weather during the early soybean harvest is always a potential problem in Brazil. Extended periods of wetness after the soybeans are mature can result in lower yields and poor quality seed.