November 11, 2011

Northern Sao Paulo is One Area of Dryness in Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

While most Brazilian farmers have been pleased with the start to the growing season, there remain a few pockets of dryness in Brazil especially in the northern part of the state of Sao Paulo. Even though planting should be winding down by this time of the year, many farmers in the region have planted less than half of their intended corn and soybean acres. The problem has been the irregular shower activity thus far this growing season.

In the northern part of the state, the rains started in August, but they have been light and sporadic with only two or three inches of accumulated rainfall over the last three months. This has not been enough to recharge the soil moisture to the point where germination and stand establishment could be insured for the newly planted crop. With many areas still powder dry, farmers are opting to hold off planting until additional rainfall occurs.

Agronomists from the cooperative Coacavo, which is located in northern Sao Paulo, indicate that many of their 4,200 members have less than half of their intended corn and soybean acres planted. The ideal planting window for corn has already passed, but for soybeans, there is still time to plant the crop and to expect a normal yield.

Ironically, some farmers in the region opted to plant a lot more full-season corn this year due to the strong corn prices and weaker Brazilian currency. Several months ago, farmers were able to forward contract their corn for as much as R$ 31.00 per sack or US$ 8.25 per bushel. If not a record price, it was close to an all-time record price for corn. The most aggressive farmers contracted as much as 50% of their anticipated corn production and they are now nervous not having been able to plant their corn.

In the southern part of the state, the weather has been fine and the planting is nearly finished. The corn and soybeans were planted within the appropriate planting window and if the summer weather is normal, farmers are anticipating a good harvest for their 2011/12 crops.