Jan 08, 2019

Brazilian Soybean Farmers Report Disappointing Early Yields

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

January is traditionally the peak of the summer rainy season in Brazil, but you would never know it by looking at the current weather in Brazil. The recent rains have been in the form of scattered afternoon thunderstorms instead of what is often a week or two of heavy overcast skies with intermittent rains at any time of the day or night. Even with the scattered showers, the rainfall amounts have been below normal and the distribution has been very uneven.

The driest area remains western Parana, southern Mato Grosso do Sul, and Sao Paulo. Many farmers in this location have not received a good rain in 30-40 days or more and the temperatures have been above normal. Some rainfall has returned to the area, but the amounts have been below normal and the distribution has been irregular. I looks like the rainfall amounts in southern Brazil will pick up this week, but some unfortunate producers even missed the most recent rains.

The newest area of concern I think is northeastern Brazil. Recent rains have been less than normal and the forecast is calling for hot and dry conditions at least for the next two weeks in northeastern Brazil. The soybeans are planted later in northeastern Brazil, but the crop is now setting pods and filling pods, so this area needs to be watched closely.

Virtually every major soybean producing state in Brazil is now forecasting that the soybean yields in 2018/19 will be lower than in 2017/18. The reductions range from 5% down to 30% or more depending on location. I would estimate that approximately 60% or more of Brazil's soybeans are in critical pod filling phase. In any given area, additional rainfall going forward would probably stop the yield declines, but they would not add-back to yields already lost, especially for the early maturing soybeans.

Some areas of Brazil could have the driest early January in 10 years. For the next couple of weeks, the rainfall in Mato Grosso, Goias, Mato Grosso do Sul, Sao Paul, and northeastern Brazil might be down 50% to 90% below normal. Only far southern Brazil and Argentina are expected to receive large volumes of rainfall.

Mato Grosso - where the early soybean harvest has started, average yields are below last year according to president of the Soybean and Corn Producers Association of Mato Grosso (Aprosoja/MT). The soybeans were planted early this year, but hot and dry weather during December hit the early maturing soybeans just at the wrong time resulting in lighter seed weights.

In the municipality of Lucas do Rio Verde, which is located in south-central Mato Grosso, early yields in the range of 52 to 55 sacks per hectare (46 to 48.8 bu/ac), but farmers were expecting 60 to 65 sacks per hectare (53 to 57.7 bu/ac). So yields are down about 8 bu/ac or in the range of 10-15%. Everything looked good in October and November with very good rains, but December turned dry with 15-20 days without rain accompanied by high temperatures and intense solar radiation. The driest part of the state continues to be the eastern areas.

Parana - In the municipality of Cascavel, which is located in western Parana, many producers went 30-40 days without rain at a critical time when the early maturing soybeans were filling pods. The temperatures at the time were very hot and the solar radiation was intense.

A few fields have been harvested with disappointing results and many farmers fear that their soybean yields will be down 30-35% compared to what they had anticipated for their 2018/19 soybean crop. Rainfall in the area has improved and if they continue to receive rain, it could stop the downward decline in yields, but it would be too late for any recovery of the early maturing soybeans. The later maturing soybeans could still be helped by additional rainfall.

One of the problems in Parana is the fact that a lot of the soybeans were planted in a very narrow window as soon as they were allowed to start plating on September 10th. The summer rains started early and there was good soil moisture, so everyone started planting at the same time. The narrow window for planting resulted in much of the crop reaching the critical pod filling period also in a narrow window. Unfortunately, the hot and dry weather hit the early maturing soybeans just at the wrong time.

The governor of Parana indicated that losses could be as high as 30% in some areas, but it is too early to say for sure. Soil temperatures during December reached 55°C or 131°F which slowed plant growth resulting in poor seed development. Agronomists are advising farmers to now focus on the second crop of corn and do whatever they can to maximize yields.

Deral usually releases a weekly report about the crop conditions in Parana, but they have not released a report since mid-December. Their last report was issued December 17th.

Mato Grosso do Sul - The situation is very similar across the border in southern Mato Grosso do Sul where the Soybean and Corn Producers Association of Mato Grosso do Sul (Aprosoja/MS) recently lowered their estimate for the 2018/19 soybean crop in the state to 8.9 million tons down which was down 11% from their previous estimate of 10 million tons.

Rainfall has been very irregular in the state with one farm receiving some rain while 10 miles down the road, it has not rained for 40 days. Some farmers in southern Mato Grosso do Sul are expecting to harvest 30 sacks per hectare (26.6 bu/ac), while other more fortunate producers are expecting to harvest 60 sacks per hectare (53.2 bu/ac).

The early maturing soybeans in the southern part of the state will be the most impacted, but there could also be lower yields in the northern regions of the state as well.

Minas Gerais - The Soybean and Corn Producers Association of Minas Gerais (Aprosoja/MG) estimates that the soybean yields in the state will be down 10-15%. The rains have been very irregular with some areas not receiving any rain for 20 days and counting. The early soybean harvest in the state will start at the end of January.

Santa Catarina - It was a hot week last week in Santa Catarina. The capital of the state is the city of Floronopolis, which is located on the Atlantic Coast. The high temperature in Floronopolis last week was 40°C (104°F), which broke the old record of 38.8°C (101°F) set in 1923. It was even hotter in the interior of the state where the temperature hit 41.3°C (106°F).

Bahia and Northeastern Brazil - The recent dry weather has producers very worried in western Bahia and other regions of northeastern Brazil. Farmers planted their soybeans earlier than normal in the region due to the good early rains, but the rains have been much more scattered since mid-December. Unfortunately, there is not much rain at all in the near term forecast.

Over the past few years, the average soybean yields in western Bahia have been in the range of 53 sacks per hectare (47 bu/ac). Last year was exceptionally good with yields as high as 63 sacks per hectare (56 bu/ac). Farmers in the region are worried that if they do not receive good rains within 10 days, their yields could end up at 40 sacks per hectare (35 bu/ac) or lower.

Rio Grande do Sul - In contrast to the rest of Brazil, Rio Grande do Sul has been inundated with heavy rains and there is more rain in the forecast. In the northwestern part of the state, some producers have reported that they will have to replant 30-40% of their soybeans due to the saturated conditions. They will not be able to plant this week due to the wet forecast, so the replanted soybeans will be planted very late.

It is always very difficult to estimate soybean yield losses before the combines enter the field. In Brazil, the most optimistic estimates have the 2018/19 Brazilian soybean crop down 5% from last year, which would be down about 6 million tons to approximately 114 million tons. The most pessimistic estimates have the 2018/19 Brazilian soybean crop down 20% from last year, which would be down about 24 million tons to approximately 96 million tons! At this point, it is impossible to say where the total soybean production will end up, but we can say that the estimates of the Brazilian crop are heading lower.