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November 13, 2017

Brazilian Farmers Wrapping up Disappointing Wheat Harvest

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

Wheat is the only major crop for which Brazil is not self-sufficient. Brazilian farmers traditionally have a difficult time producing enough wheat to meet domestic demand and they certainly do not produce enough high quality wheat for local millers. Brazilian farmers are wrapping up their 2017 wheat harvest and once again, it has been a disappointing crop.

The state of Parana is the largest wheat producing state in Brazil and the Department of Rural Economics (Deral) is reporting that 90% of the wheat in the state has been harvested. In their latest monthly report, Conab is estimating that Parana will produce 2.25 million tons of wheat, which represents a decrease of 34% compared to last year.

The second largest wheat producing state is Rio Grande do Sul and Emater-RS is reporting that the crop is 78% harvested in the state. The average yield thus far in Rio Grande do Sul is in the range of 2,000 to 2,400 kg/ha (29 to 34 bu/ac) and the quality of the wheat is considered to be average to poor. Conab is estimating that the state will produce 1.53 million tons, which is down 38% compared to last year.

For Brazil as a whole, Conab is estimating the wheat production at 4.56 million tons, which is down 32% compared to last year. The domestic demand is estimated at 11.2 million tons and imports are estimated at 7.0 million tons.

The quality of the wheat is such that some of it will only be suitable for feed wheat. The consulting group Consultoria Trigo & Farinhas is estimating that 500,000 tons of the wheat will only be suitable for feed wheat this year in Brazil. Parana is expected to have 300,000 tons of feed wheat with the other 200,000 tons coming from Rio Grande do Sul and Santa Catarina. The problems during the growing season in all three states included dry weather, freezing temperatures, and heavy rains at harvest.

Emater is already expecting that farmers in the state of Rio Grande do Sul will reduce their wheat acreage even more next season due to low yields, poor quality and low prices. That has been the trend for a number of years and it is expected to continue next season as well. The average price is R$ 29.83 per sack (approximately $4.17 per bushel).