October 25, 2016
Brazilian Farmers Planting Soybeans "Day and Night"
The 2016/17 Brazilian soybean planting is 28% compared to 20% last year and 27% average. The crop that has germinated is rated in good condition and the forecast generally looks favorable.
Brazilian weather - The weather continues to be conducive for rapid planting in most of Brazil with the exceptions of two locations. It has been very wet in far southern Brazil especially in the state of Rio Grande do Sul which accounts for approximately 14% of Brazil's soybean production. The other area of weather concern is in northeastern Brazil where dry weather is the concern and that region accounts for approximately 10% of Brazil's soybean production.
The forecast in Brazil continues to look favorable for much of Brazil due to a breakdown of the blocking pattern which should allow for more moisture to move into Mato Grosso, Goias, and Minas Gerais. Meteorologists in Brazil are predicting that the summer rains season in central Brazil should become more widespread and stable starting within a week or so.
An area to watch going forward will be northeastern Brazil where the forecast does not look good. There appears to be little rainfall in the forecast for at least the next ten days. The summer rains typically start later in northeastern Brazil, so it is not too unusual for dry weather in October and early November. Northeastern Brazil is in a severe drought and there is a growing concern for the row crop areas of western Bahia, Piaui, Maranhao, and Tocantins. There are also concerns about dryness in eastern Goias and northern Minas Gerais.
Mato Grosso - According to the Mato Grosso Institute of Agricultural Economics (Imea) soybean planting in Mato Grosso advanced to 42% planted as of late last week, which is double last year's pace of 20%. Soybean planting in the state advanced 10% last week. The soybean planting is most advanced in the western part of the state where 66% of the crop has been planted. It is least advanced in the northeastern part of the state where 9% of the soybeans have been planted. Good rains in the central and western regions of the state is encouraging farmers to plant "day and night." Planting has been slower in the eastern regions of the state due to dryer weather.
Ironically, the rapid planting pace has some farmers worried that they might actually be planting too fast because at this rapid pace, a high percentage of the crop will be ready to harvest at the same time next January and February. That could be a concern because that is the height of the rainy season, which could make harvesting difficult. There is always a tradeoff in central Brazil - plant the soybeans early in order to allow enough time for the safrinha corn, but then run the risk of wet weather during harvest.
Imea is estimating the soybean acreage in Mato Grosso at 9.37 million hectares or up 0.6% compared to last year with a production of 29.9 million tons, which would be an increase of 7.5% due to higher yields compared to last year.
Early soybean harvest in Mato Grosso is good for safrinha corn and exports - Depending on the region of the state, many soybeans in Mato Grosso are being planted 2-4 weeks earlier than last year. This is very good news for the 2016/17 safrinha corn crop because many farmers have indicated that they have already planted nearly all of the soybeans that they intend to follow with a second crop of corn. That means that they should be able to plant all their intended safrinha corn acreage in a very timely manner. If the weather cooperates next January and February, this early planting of the soybeans could be very good for the safrinha corn crop.
With the quick start to planting, it is estimated that 25% of the soybeans in Mato Grosso will be harvested by the end of January compared to an average of approximately 10%. That means that there will probably be an early movement of soybeans to export facilities next January and February. Additionally, the Brazilian corn exports will be completed long before any soybeans arrive at the ports so therefore, the port facilities should be wide open for the soybeans. At this point, I would expect a quick start to Brazil's soybean exports early next year.
Parana - Farmers in Parana have planted more than 50% of their intended soybeans compared to 35% last year at this time. The planting is most advanced in the western part of the state with planting in the municipalities of Cascavel and Toledo nearly complete. This is not only good news for the soybean crop, it is also good news for next year's safrinha corn crop as well. The main concern for safrinha corn in Parana is the possibility of cold weather moving in before the crop is mature, so the earlier the corn is planted, the lower the possibility of frost impacting the crop.
Rio Grande do Sul - The weather last week in Rio Grande do Sul was very wet with repeated heavy rains especially across the central part of the state. In the hardest hit areas, 12-15 inches of rain fell last week with over 79 municipalities reporting localized flooding due to the rain and there is more rainfall in the forecast for this week. The heavy rains have already impacted the wheat crop in the state that is approaching harvest. They have also delayed the rice planting and the soybean planting. November is the main soybean planting month in Rio Grande do Sul, so the planting progress in the state needs to be watched. Currently, maybe 10% of the soybeans in the state have been planted.