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October 19, 2012

Improved Moisture Encourages Soy Planting in Mato Grosso do Sul

Recent rains in the center-west region of Brazil have allowed farmers in the region to step up their soybean planting pace after a relatively slow start to the summer rainy season. In the state of Mato Grosso do Sul, many farmers had been waiting for enough rainfall to recharge the short soil moisture to the point where germination and stand establishment of the new crop would be insured.

Farmers in the state were allowed to start planting their 2012/13 soybeans as of September 15th, but few did so due to the dry conditions. By October 10th, only 2% of the two million hectares of soybeans in the state had been planted, but the planting pace has increased this week and it is now estimated that 12-13% of the crop has been planted.

October is the primary month for plating soybeans in the state and soybeans could be planted until November 15th is needed. Farmers would like to plant their soybeans as early as possible in order to allow enough time to plant a second crop of corn after the soybeans are harvested. A majority of the soybeans in the state will be followed by a second crop of corn as farmers try to take advantage of the complete growing season. If planting of the corn is delayed early next year, the crop could run into dry weather or cold temperatures before the grain filling phase is complete, thus resulting in reduced yields.

In Conab'bs first estimate of the 2012/13 growing season, they estimated that the soybean acreage in the state will increase to 2.01 to 2.06 million hectares or an increase of 11% to 14%. The total soybean production in the state is estimated at between 6.08 to 6.24 million tons or an increase of 31% to 35% compared to the 2011/12 growing season.

Farmers in the state have been very aggressive in forward contracting their anticipated 2012/13 soybean production. Approximately 45% of their production has already been forward contracted at prices between R$ 50 and R$ 60 per sack of 60 kilograms. At these elevated prices, farmers will be assured of profitable soybean production in 2012/13.