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March 31, 2017

Last Soybeans Harvested in Brazil could push Estimates Higher

The nationwide soybean harvest in Brazil is approaching three-quarters complete. The last two regions of Brazil to harvest soybeans are Northeastern Brazil and the southernmost state of Rio Grande do Sul. In both regions, farmers have very high hopes for their 2016/17 soybean production. Farmers have not yet started harvesting their soybeans in northeastern Brazil, while in Rio Grande do Sul, the crop is approximately one-quarter harvested.

Northeastern Brazil, which encompasses the states of Maranhao, Tocantins, Piaui, and Bahia or Matopiba as it is known, generally produces approximately 10% of Brazil's soybean crop. For the last several years, farmers in the region have been frustrated by low yields due to adverse weather, but the 2016/17 growing season has been just the opposite. The summer rains have been heavier than normal and well distributed resulting in very good growing conditions.

Bahia is the largest soybean producing state in the region and the state may produce their best soybean crop ever in 2016/17. That is the assessment of the consulting group Agroconsult which recently sent a team of specialists to the region as reported by Reuters. After short periods of dryness at the start of the growing season, the summer rains stabilized and were very well distributed during the entire growing season. Many farmers in the region are expecting soybean yields as high as 4,000 kg/ha (58 bu/ac), which would be double last year's yields.

After losing money with their 2015/16 soybean crop, some farmers in the region switched from cotton to soybeans this year in an effort to save money. Many farmers also reduced their fertilizer applications, also in an effort to trim costs. The improved weather this year more than compensated for the reduced fertilizer applications and many farmers are expecting record high soybean yields.

The other area left to harvest in Brazil is Rio Grande do Sul and the story is very similar in that state as well. Generally, Rio Grande do Sul is responsible for approximately 14% of Brazil's soybean production. Farmers are actively harvesting their soybeans in the state and many are reporting record high soybean yields in the range of 50 to 70 bu/ac. These are extremely good yields for a state that generally has the lowest statewide soybean yields of any major soybean producing state in Brazil.

Specialists from Agroconsult have indicated that they will probably increase their 2016/17 Brazilian soybean estimate in their next monthly report. Their last estimate of the 2016/17 Brazilian soybean crop was 107.8 million tons, but they are expected to increase that estimate in their next monthly report to perhaps 110-111 million tons. They feel the soybean crop in northeastern Brazil is 1.5 million tons larger than their last estimate and in Rio Grande do Sul, they also feel it could be 1.5 million tons larger than last month.