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October 13, 2017

Mato Grosso to Produce Less Soybeans and Corn in 2017/18

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

The early planting weather in Mato Grosso this year has not been nearly as good as last growing season. Some regions of the state did receive good rains over the last two weeks while other regions missed out entirely on the rainfall. The forecast for the next two weeks is for generally dry conditions across much of the state.

Mato Grosso is Brazil's largest soybean, corn, and cotton producing state. In their first evaluation of the 2017/18 growing season in Brazil earlier this week, Conab estimated that both the soybean and corn crops in the state will be lower than last year's production. The reason for the lower anticipated production are lower yield forecasts for both crops. Last year, the weather across the state was ideal and as a result, farmers harvested record crops. Those conditions will be difficult to replicate in 2017/18.

Soybeans are the main crop in Mato Grosso and Conab estimated that the soybean acreage would increase between 1% and 3%, but that the soybean production will decline between 3.5% to 5.4%. The lower production estimate is the result of lower yield forecast for 2017/18 soybean crop. The 2017/18 statewide soybean yield is estimated at 3,067 kg/ha (44.7 bu/ac), which is 6.3% less than last year's yield of 3,273 kg/ha (47.4 bu/ac).

The director of the Soybean and Corn Producer Association of Mato Grosso (Aprosoja), Nelson Piccoli, agrees with the lower yield estimate. He feels that the low probability of rain across the state over the next few weeks could jeopardize the early crop growth, but the main impact of dry weather for the remainder of October will be on the safrinha corn crop.

If the rains don't become more regular very soon, the resulting delay in soybean planting will also delay the planting of the safrinha corn early next year and that could put the safrinha corn crop at risk.

Farmers in Mato Grosso plant a small amount of full-season corn, but it is less than 1% of the total corn production in the state. Last year, farmers in the state planted 33,400 hectares of full-season corn and that is expected to decline slightly this growing season.

Over 99% of Mato Grosso's corn is planted as the safrinha crop and last year farmers in the state planted 4.60 million hectares of safrinha corn. In the October Crop Report, Conab carried forward last year's safrinha corn acreage, but they did lower the estimated yield of the safrinha corn compared to last year. The 2017/18 safrinha corn yield was estimated at 6,048 kg/ha (93.1 bu/ac), which is 2.6% less than last year's yield of 6,212 kg/ha (95.6 bu/ac). Conab will conduct a survey in January concerning the safrinha corn acreage which will be released in their February Crop Report.

Cotton is the third biggest crop in the state and Conab estimated that farmers in the state will increase their cotton acreage from 9% to 10%. Last year farmers in the state planted 627,800 hectares of cotton. Approximately 90% of the cotton in the state is planted as the safrinha crop after the soybeans are harvested. Safrinha cotton and safrinha corn compete for the same acreage in Mato Grosso. Relative to each other, cotton prices are generally better than corn prices, so some farmers may switch safrinha corn to cotton if they were already cotton producers. The safrinha corn acreage in Mato Grosso is more than 7 times larger than the safrinha cotton acreage in the state, so a big increase in cotton acreage might mean only a small reduction in the safrinha corn acreage.