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November 8, 2017

Brazil Planting Continues slower than last Year

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

Brazilian Soybeans - The Brazilian soybean crop is now 43% planted as of last Thursday according to AgRural. This compares to 53% last year and 44% average. The soybean planting last week advanced 13%.

In the state of Mato Grosso, the soybeans are 64.8% planted as of late last week according to the Mato Grosso Institute of Agricultural Economics (Imea). The planting advanced 20% last week, but it still trails last year when 80% was planted by this date. The most advanced planting is in western Mato Grosso where 92% of the soybeans have been planted (5% slower than last year). Central Mato Grosso is 80% planted (13% slower than last year). The most delayed planting is northeastern Mato Grosso where 12% have been planted (21% slower than last year). Northeastern Mato Grosso is also the driest part of the state.

In the state of Parana, the Department of Rural Economics (Deral) reported that as of a week ago, 73% of the soybeans had been planted and that 16% of the soybeans were germinating and 84% were in vegetative development. Four percent of the soybeans were rated in average condition and 96% were rated in good condition.

In the city of Maringa in northern Parana, they received 370 mm of rainfall (15 inches) during October and 100 mm thus far in November (4 inches). The slowdown in rainfall has allowed farmers in the region to near completion of their soybean planting. They are expecting good soybean yields, but they are worried about the soybean price.

In Maringa, the soybean price is in the range of R$ 62 to R$ 63 per sack (approximately $8.80 to $9.25 per bushel), which covers the cost of production but with very little margin. Farmers in the region still have about 30% of last year's crop to sell and they have done very little forward contracting of their 2017/18 crop. The farmers say they are waiting for R$ 70 per sack (approximately $10.00 per bushel) before they resume selling.

Of the major soybean producing states in Brazil, the state of Goias is furthest behind in planting the 2017/18 soybean crop. According to the Soybean and Corn Producers Association of Goias (Aprosoja-GO), by the end of October, less than 10% of the intended soybeans had been planted compared to 25% last year. In some of the major soybean producing regions of the state, soybean planting might have been only 5% completed by the end of October compared to last year when it could have been as high as 80% completed by the end of October.

The state of Goias is the fourth largest soybean producing state in Brazil after Mato Grosso, Parana, and Rio Grande do Sul. It is also a major safrinha corn producing state ranking fourth behind Mato Grosso, Parana, and Mato Grosso do Sul.

The ideal soybean planting window in the state closes about November 10th. Since the soybean planting is already getting very late, farmers in the state are being advised to do a good job on plating their soybeans and not to rush the planting just to allow enough time for a second crop to be planted after the soybeans are harvested. Farmers in the state make their living primarily on their soybean production, so their top priority should be trying to plant the soybeans as good as possible.

Brazilian Corn - AgRural reported that 49% of the full-season corn had been planted by the end of last week compared to 63% last year and 51% average.

While the current focus is on the delayed soybean planting, I think these delays are actually a bigger issue for corn issue than for soybeans. Soybeans can withstand adverse weather early in the growing season and still yield OK if the weather cooperates during the critical pod setting and pod filling periods. Corn on the other hand, is more sensitive to adverse conditions during pollination and grain filling.

The potential problem for the Brazilian corn crop is the fact that as much as 75% of the corn will be safrinha production and the safrinha corn yields can be sensitive to when the crop is planted.

The Mato Grosso Institute of Agricultural Economics (Imea) looked at the current rate of soybean planting in the state and extrapolated as to when the safrinha corn may be planted. Based on the maturity of soybeans planted in the state (early maturity, medium maturity, and late maturity) and assuming the harvest will not be delayed by wet weather, they concluded that it is possible that 30% of the safrinha corn could be planted outside the ideal planting window, which closes about the third week of February.

The amount of safrinha corn planted outside the ideal window will be even larger in the state of Goias. Most of the soybean varieties recommended for the state of Goias are 105 to 115 day maturity. Therefore, if these maturity soybeans are planted in early-November, they would not be harvested until late February or early March. It is possible that as much as half of the safrinha corn acreage in Goias would be planted after the ideal planting window closes.

The ideal planting window for safrinha corn in Goias closes about the third week of February, so if farmers have not planted their safrinha corn by that date, they may consider planting an alternative crop such as grain sorghum, dry beans, sunflowers, or a ground cover that could improve the soil structure for the next crop.

Some farmers have already indicated that they intend to reduce their safrinha corn acreage due to the delayed soybean planting in addition to using 20% to 30% less technology such as fertilizers, chemicals and seeds on their safrinha corn. Farmers may avoid planting safrinha corn on marginal areas where corn yields might be lower.