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November 1, 2017

2017/18 Brazilian Soybean Planting Remains Slow

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

The Brazilian soybean crop is approximately 31% planted compared to 40% last year and 34.5% average. Planting continues to be slow due to previously dry conditions in central Brazil and wet conditions in southern Brazil. There may actually need to be some replanting in central Brazil due to poor plant populations of the earliest planted soybeans.

Even though the soybean planting has been delayed in areas of Brazil, the delay does not necessarily mean that the soybean yield will end up being below trend. Soybeans planted in November in central Brazil could still do OK if the weather cooperates. It would be much more important is there is adverse weather during December-January-February when the crop is setting pods and filling pods.

Instead of comparing the start of the growing season this year with the average, I think it is more important to compare it to what happened last year. This year has been a slow start, but the crop could still end up OK if the weather cooperates. Last year was a record fast start and the weather was nearly ideal during the entire growing season, especially in areas that are traditionally low yielding. As a result, Brazil set record high soybean yields in 2016/17. The odds of repeating those record high yields again this year are very small, so there is a very high probability that the soybean production in 2017/18 will be less than the 114 million tons produced in 2016/17.

Mato Grosso - Soybean planting in Mato Grosso is slow all across the state. According to the Mato Grosso Institute of Agricultural Economics (Imea), the soybean crop in the state is 44% planted compared to 67% last year (23% slower than last year). Last week, farmers in the state increased their soybean planting by 18%. The western region of the state is most advanced at 79% planted (9% slower than last year), while central Mato Grosso is 58% planted (25% slower than last year). The slowest and driest part of the state is the northeastern region where just 5% of the crop has been planted (15% slower than last year).

There is even some talk in Mato Grosso that instead of planting their soybeans extra late, some farmers may opt to plant full-season cotton instead starting in December. Cotton prices are relatively good while soybean prices are marginal at best.

Parana - Soybean planting is furthest advanced in the state of Parana where an estimated 70% of the crop has been planted. Recent heavy rains have slowed planting and it is possible that some of the soybeans may need to be replanted due to localized saturated conditions.

Rio Grande do Sul - Farmers in Rio Grande do Sul are just getting started on their soybean planting where 3% of the crop has been planted according to Emater.

Goias - Soybean planting in Goias is the most behind of any major producing state in Brazil. Goias is the fourth largest soybean producer after Mato Grosso, Parana, and Rio Grande do Sul. Dry conditions have kept farmers out of the field and the state has received only about 10% to 15% of its normal October rainfall.

As of last Thursday, 6% of the soybeans had been planted in the state compared to 42% last year and 28% average. Farmers in the state are now rushing to complete the planting before the ideal planting window closes about November 10th. A potential future problem in the state is the fact that nearly all the soybeans in the state will go through their developmental cycle at the same time, thus increasing the risk of yield loses if there is dry weather during flowing or pod filling.

As an illustration of just how dry it has been in central Brazil, there have been numerous fires burning across the state of Goias in recent weeks, which had missed out on the rains until this past weekend. The worst of the fires have been in the Chapada dos Veadeiros National Park where more than 68,000 hectares had burned by the end of last week (168,000 acres), or approximately 30% of the total park. The savanna vegetation in the park is extremely dry after months without rain and in fact three years of below normal rainfall.

The authorities in charge announced on Monday that the fire was under control and that rainfall on Saturday allowed firefighters to gain the upper hand.

Nearly all the fires during the dry season in the cerrado region of central Brazil are caused by humans. They cannot be caused by "dry lighting" because there are no thunder storms during the dry season. They are most likely caused by ranchers clearing their pastures of dry grass. This type of land clearing is strictly prohibited because these fires can get out of control, which is probably what happen in this case.

If the person who started the fire is identified, they can face 1-4 years in prison and a fine of R$ 5,000 per hectare burned (approximately $650 per acre).