January 30, 2017
Mato Grosso Soybean Harvest Slowed by Rain for Second Week
The soybean harvest in Mato Grosso was slowed by wet weather for the second week in a row. The Mato Grosso Institute of Agricultural Economics (Imea) estimated that as of last Friday, farmers in the state had harvested 16% of their soybeans. Based on when the soybeans were planted and the maturity group of the soybeans, Imea had anticipated that 25% of the crop would had been harvested by this date. By the end of January 2016, 8% of the soybean crop had been harvested and the average for the end of January is 10% to 12%.
A stationary front has been draped over central Brazil helping to funnel moisture from the Amazon down across Mato Grosso, Mato Grosso do Sul, Goias, and Sao Paulo. Whenever there is a few hours of sunshine, farmers are trying to get in the fields to do some harvesting.
Farmers have already reported problems with the quality of some of the soybeans that have been sitting in the wet weather for several weeks. Some of the soybeans are losing weight as fungal diseases move into the seeds. In a few of the most impacted fields, the soybeans may only be suitable for animal feed. If the rainfall in the state decreases over the next several weeks, the overall soybean production in the state is still expected to set a new record.
Parana is the second leading soybean producing state in Brazil and the Secretary of Agriculture in the state of Parana indicated that the early soybean harvest has started in the state and that 1% of the soybeans have been harvested. The third largest producing state is Rio Grande do Sul and the soybeans in that state are 40% flowering and 20% filling pods. The soybean harvest in Rio Grande do Sul will start later in February.
Farmers in Brazil did little forward contracting of their soybean crop last week. In Mato Grosso, the 2016/17 soybean crop is 55% sold and farmers are now concentrating on trying to get some harvesting done between rain showers instead of marketing the crop. Another reason for their hesitation in selling more of the crop is the exchange rate between the Brazilian real and the U.S. dollar. Last week it closed at 3.15 to the dollar, which is the lowest level in three months. Farmers in the state are hoping for a more favorable exchange rate in the weeks ahead.
There is also nervousness in Brazil that the level of losses in Argentina may not be as bad as expected and if the Argentine crop estimates start to creep higher, it could further pressure prices.