October 26, 2018

Brazil's 2018 Wheat Crop disappoints once Again

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

Wheat production in Brazil has always been problematic and that is proving true once again this year. The biggest obstacle to wheat production in Brazil is wet weather during harvest. Parana is the largest wheat producing state in Brazil and farmers in the state are winding down their wheat harvest with generally disappointing results. Late season frosts and heavy rains over the last two months have resulted in lower yields and inferior wheat quality.

The second largest wheat producing state in Brazil is Rio Grande do Sul and the early harvest results are not encouraging. Market specalists are reporting wheat yields below what were expected with poor quality wheat also being reported.

Farmers in Rio Grande do Sul have harvested approximately 30% of the 700,000 hectares of wheat planted in the state. Private estimates now put the statewide wheat yield in the range of 1,800 kg/ha (26.6 bu/ac), which is down from last month when they estimated the yield at 2,100 kg/ha (31.0 bu/ac). The quality of the first 30% of the wheat crop in Rio Grande do Sul was good, but that may not be the case for the remainng 70%. Of the approximately 500,000 hectares still in the field, 50% is rated in good condition, 40% is rated average, and 10% is rated in poor condition according to private estimates.

Brazil only is able to produce about half of its domestic demand for wheat with the remaining being imported from primarily neighboring Argentina. Ninety percent of Brazil's wheat is produced in southern Brazil where wet weather during harvest is a reoccurring problem.

To overcome this problem, there has been some progress in increasing wheat production in central Brazil using irrigation during the dry season, which is generally from May to September. Early results have been very encouraging with high yields being reported as well as good seed quality. The amount of irrigation though is limited, so Brazil's wheat production will remain concentrated in southern Brazil for the foreseeable future.