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October 22, 2020

Wheat Yields in Rio Grande do Sul Disappoint

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

Brazil's southernmost state of Rio Grande do Sul is Brazil's second largest wheat producing state after Parana. Farmers in the state are in the process of harvesting their wheat and they are reporting disappointing yields. According to Emater-RS, the wheat harvest is 20% complete statewide with some of the areas in the northern part of the state as much as 50% harvested.

According to the President of the Federation of Agricultural Cooperatives in the State of Rio Grande do Sul (FecoAgro/RS), the wheat production in the state could be down as much as 30% from initial expectations. The wheat crop in the state encountered a series of weather problems during the growing season including a prolonged period of dry weather capped off by freezing temperatures on September 22nd when the wheat was in its reproductive phase.

FecoAgro/RS is now estimating that the state will produce approximately 2 million tons of wheat compared to their earlier estimate of 3 million tons. Last year, the state produced 2.2 million tons of wheat.

Strong wheat prices encouraged farmers in the state to increase their 2020 wheat acreage by 26%. Current wheat prices in the state are exceptionally high at R$ 70.00 per sack (approximately $5.85 per bushel), but many farmers will not receive those high prices because as much as 1 million tons of wheat was earlier forward contracted for much lower prices.

The largest wheat producing state in Brazil is Parana and the Department of Rural Economics (Deral) is estimating that more than 80% of the wheat in the state has been harvested and that the state will produce 3.3 million tons of wheat. Brazil only produces about half of the wheat needed to supply the domestic market with most of the remainder imported from neighboring Argentina.

In both Rio Grande do Sul and Parana, farmers will plant their 2020/21 soybeans immediately after the wheat is harvested.