Nov 10, 2010
Mato Grosso Farmers Will Have 75% Less Soy to Sell In January
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The extended dry season on Mato Grosso delayed the start of the soybean planting and it will also delay the beginning of the soybean harvest as well. The Mato Grosso Institute of Agricultural Economics (Imea) estimates that the farmers in Mato Grosso will have 75% less soybeans to sell in January 2011 compared to January 2010. Imea estimates that the farmers in Mato Grosso will harvest only 1.0 million tons of soybeans in January 2011 compared to 4 million tons harvested last January.
Soybeans harvested in January always command a premium from domestic crushers who want to get their operations up and running. Last January, the premium for January delivered soybeans averaged US$ 0.49 per bushel. The premiums being offered for January 2011 have already risen to US$ 0.77 per bushel and they could still move higher. Since farmers in Mato Grosso will have fewer soybeans to sell in January, they will miss out on most of the potential premiums. Imea estimates that farmers in the state will miss out on R$ 120 million of potential income due to not having any soybeans to sell during January. Over the last ten years, the average price for soybeans in January in Mato Grosso has averaged 3% more than during the rest of the year.
The lack of soybeans in January could force processors to source their soybeans in Parana where farmers were able to plant their soybeans at a quicker pace than in Mato Grosso.
The delayed harvest in Mato Grosso is also going to affect when new crop soybean exports start to flow out of Brazil next year. New crop soybean exports from Brazil are expected to start approximately three weeks later than they did in 2010.
For those farmers who were fortunate enough to receive some of the earliest rains and they have soybeans to sell during January, they should be able to command a very good price for their soybeans.