Dec 30, 2020
Recent Rains in Central Brazil Help to Stabilize Soybean Crop
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The weather in Brazil has slowly improved over the past few weeks, but the rainfall is still scattered in nature instead of the widespread rains that are typical this time of the year. Some of the areas where the soil moisture has not been fully recharged include: Rio Grande do Sul, parts of Mato Grosso do Sul, southwestern Goias, isolated pockets in Mato Grosso, and northeastern Brazil. The forecast for this week is calling for improved rainfall across much of central and south-central Brazil.
The rainfall over the last few days has been good enough to stabilize the crop, at least for the time being, but if the rainfall starts to disappoint, the soybean estimates could move lower.
The earlier planted soybeans are setting pods and filling pods, so the crop cannot afford any prolonged periods of dry weather. The latest developing soybeans are in southern Brazil especially Rio Grande do Sul and also in northeastern Brazil. The soybeans in those two areas are starting to flower.
Mato Grosso Soybeans - Imea estimates that at least 2.5% of the state's soybeans had to be replanted due to poor plant populations. They estimated that the soybean acreage increased 3% to 10.3 million hectares (25.4 million acres). Due to the irregular weather, Imea lowered the statewide soybean yield estimate to 57.4 sacks per hectare (51.3 bu/ac), which would be down 3% compared to last year. The 2020/21 soybean production in the state was estimated at 35.4 million tons, which is up only 0.2% compared to last year.
Imea estimates that farmers in the state have forward contracted 66.4% of their anticipated soybean production compared to 51% last year at this time and 47% average. Farmers only increased their forward sales 2% in November due to concerns about potential lower yields.
Imea indicated that the soybean price in 2020 averaged R$ 111.06 per sack ($9.70 per bushel), which was a 65% increase over 2019. The high price for the year was approximately R$ 170.00 per sack (approximately $14.85 per bushel). It is estimated that about 60% of the forward sales were made when prices were much lower than the current prices.
The conclusion of Highway BR-163 between northern Mato Grosso and ports on the Amazon River in early 2020 was an important milestone for the state of Mato Grosso. With the resulting lower transportation costs, there is now a higher volume of Mato Grosso produced soybeans being sent north to ports in northern Brazil than the traditional ports in southern Brazil.
Municipality of Sao Jose do Rio Claro - In the municipality of Sao Jose do Rio Claro, which is located in south-central Mato Grosso, many farmers planted their 2020/21 soybeans between mid-October and mid-November, which was 3-4 weeks later than normal. The region had below normal rainfall during October and almost no rain during November and early December.
Some of the latest planted soybeans had poor emergence and delayed early growth due to dry conditions and farmers are expecting yield losses in the range of 15% to 20%. Especially hard hit were areas of pastures that were converted to soybeans for the first time. These new areas generally have lower fertility and lower organic matter making them more susceptible to adverse weather.
Parana Soybeans - The recent rains in Parana have helped to stabilize the soybean crop in the state. The Department of Rural Economics (Deral) reported earlier last week that the soybean crop was 62% in vegetative development, 28% flowering, and 10% filling pods. The soybeans were rated 4% poor, 19% average, and 77% good. Deral estimates that the 2020/19 soybean acreage increased 2% to 5.6 million hectares (13.8 million acres), but that the production will be down 2% compared to last year to 20.4 million tons. Dryer weather that delayed the early planting was cited as the reason for the lower production.
Farmers in Parana have forward contracted 43% of their anticipated 2020/21 soybean production. The average price during December was R$ 137.38 per sack (approximately $11.78 per bushel) compared to December 2019 when the average price was R$ 77.00 per sack (approximately $6.60 per bushel).
Rio Grande do Sul Soybeans - The soybeans in Rio Grande do Sul were 93% planted last week according to Emater. They are estimating that farmers in the state will plant 6.07 million hectares of soybeans (15.0 million acres). Recent rains have helped the development of the later planted soybeans.