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November 15, 2019

Rains slow Wheat Harvest and Soy Planting in Rio Grande do Sul

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

The state of Rio Grande do Sul in southern Brazil is the second largest wheat producing state in Brazil after Parana. The state was projected to produce about 38% of Brazil's 2019 wheat crop, but wheat producers in the northwestern part of the state are encountering problems in harvesting their wheat due to excessive rrians.

In an interview with Noticias Agricolas, the director of the Agricultural Federation of Rio Grande do Sul (Farsul), indicated that excessive rains have slowed the wheat harvest and resulted in poorer quality wheat. Additionally, since all the wheat in the state is followed by a second crop of soybeans, the delayed wheat harvest is also delaying the planting of the soybeans as well.

In the region of Santo Angelo, which is located in northwestern Rio Grande do Sul, early wheat yields are in the range of 50-55 sacks per hectare (44-49 bu/ac) and farmers are reporting poor quality and low protein wheat. The lower quality is being reflected in the marketplace with declining wheat prices as millers show little interest in purchasing the wheat due to the poor quality.

The delayed wheat harvest has also resulted in delayed soybean planting which is less than 20% complete compared to 45% planted last year at this time. The wet conditions have also raised concerns about increased fungal diseases and farmers are already preparing for additional fungicide applications, which will increase their already high cost of production.

Farmers in the region have forward contracted 30% of their anticipated 2019/20 soybean production in order to cover some of their production costs. They are expected to increase their sales in January and February once they know more about their soybean production. Further sales are anticipated in April during the soybean harvest.

Wheat producers in the state are frequently confronted with poor quality wheat due to excessive rains during harvest. The lack of interest on part of the millers is also due to the fact that higher quality wheat is usually easily available from neighboring Argentina.

The wheat acreage in the region increased 6% this year, but the director of Farsul anticipated a reduction in wheat acreage in 2020 as farmers reevaluate if it is worth the investment to plant wheat next year.