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January 6, 2016

Welcomed Rains Falling in Central and Northeastern Brazil

After several months of only receiving scattered showers, it looks like the rainfall this week in central and northeastern Brazil will be the best of the growing season thus far. Additionally, the forecast is also calling for more rainfall next week as well. This is very welcome news because the rains are falling in some of the driest areas of Brazil.

The moisture will help to stabilize the later planted and the later maturing soybeans in Mato Grosso that are now setting and filling pods. Unfortunately, it is coming too late for many of the early planted or early maturing soybeans in Mato Grosso that were filling pods under adverse conditions. Those soybeans are already approaching maturity and rain at this point will have a limited benefit.

At the end of December, the Mato Grosso Institute of Agricultural Economics (Imea) estimated that 43% of the soybeans in Mato Grosso were in poor to very poor condition. The majority of those poorly rated soybeans were the early planted soybeans that suffered under hot and dry conditions for most of their growth cycle.

The drought in Mato Grosso was most severe in the northern and eastern regions of the state. Some losses are already locked in place and as a result, Imea lowered their estimate of the state's soybean crop 1 million tons to 28 million in early December. The delayed soybean development and harvest will also delay the planting of the safrinha corn crop as well, but it is too early to say exactly what might happen to the safrinha corn acreage in the state.

The rains in northeastern Brazil, including the states of Bahia, Maranhao, Piaui, and Tocantins, will allow farmers in those states to complete their 2015/16 soybean planting. Approximately 10% of Brazil's soybean crop is planted in these four states and many farmers in the region have been struggling to plant their soybeans since October.

With the improved soil moisture, some farmers in Mato Grosso may now decide to replant their worst soybeans. This is the first growing season that the last day to plant soybeans in Mato Grosso had been set for December 31st, but that date was recently extended to January 15th due to the adverse weather. Some farm groups in Mato Grosso are now requesting that the planting deadline be extended again to January 31st to allow enough time for farmers to replant their soybeans if they choose to do so.

Conab is scheduled to release their next crop estimate on January 12th. In their December report, they estimated the 2015/16 Brazilian crop production at 102.4 million tons, but the survey for the December report was conducted in late November before the hot and dry weather developed in central Brazil leading to expectations that Conab may reduce the Brazilian soybean estimate in next week's report.