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October 3, 2011

Farmers in All of Brazil May Now Start Planting Soybeans

Farmers everywhere in Brazil can now start to plant their 2011/12 soybean crop if the soil moisture conditions are adequate for germination and stand establishment. In the major soybean producing states, the 90-day soybean free period ends on either September 15th or October 1st. In Mato Grosso and Goias it ended on September 15th and in Mato Grosso do Sul, Parana, and Minas Gerais it ended on October 1st. If a farmer wants to qualify for a production loan from the Bank of Brazil, he cannot plant before the prohibited period ends.

The timing of the first rains of the season came just right for farmers in Mato Grosso do Sul. Farmers in the state were allowed to start planting last Saturday (October 1st) and the first good widespread rains of the season fell over the weekend. Farmers in the state will now quickly go to the fields and start planting their 2011/12 soybean crop.

Producers in Mato Grosso do Sul are expected to plant a slightly larger soybean acreage compared to last year. Most of the increased acreage will come from the conversion of pastureland to additional row crop production. This has been the trend all throughout Brazil this year as new environmental regulations makes it much more difficult to open up new lands for crop production.

Farmers in Mato Grosso do Sul are hoping for a much better year than in 2010/11. Last year, their soybean crop was planted late due to a delayed onset of the rainy season and heavy rains at harvest time resulted in lower yields and lower seed quality. The final 2010/11 production in the state ended up being one million tons less than what had been expected at the start of the growing season. The delayed soybean planting also delayed the planting of the safrinha corn which then suffered from freezing temperatures that occurred late in June. If farmers can plant this year's soybean crop in a timely manner, they hope to avoid both of these problems in 2012.

Producers are very encouraged by the weakening Brazilian currency that has compensated for some of the recent price declines for soybeans. The currency is currently trading at 1.88 Brazilian reals per U.S. dollar and producers in Brazil would like to see it trade in the range of 2 reals per dollar. That is the range they feel would be the most advantageous for the agriculture sector. Several months ago the currency was trading at nearly 1.5 reals per dollar.