Dec 28, 2016

Brazil Soy Generally in Good Condition, Dryness Worries NE Brazil

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

Brazil Soybeans - For most of Brazil, the recent weather has been beneficial for the soybean crop. In central and southeastern Brazil, there have been frequent rains although the forecast is calling for less frequent rains going forward.

Mato Grosso had a very wet first half of December, but it looks like the second half of the month will end up with less rainfall. This is actually good news for farmers in the state because it will allow them the catch up on fungicide applications and to get started on the early harvest.

In Rio Grande do Sul, the soil moisture has improved, but there are still dry areas in the state. The temperatures in Rio Grande do Sul are also heating up with reading close to 100°F.

The main area of concern in Brazil is now northeastern Brazil. Over the last several weeks the region has definitely entered into a dryer pattern and there is little rainfall in the near term forecast. The growing season started off very promising, but the situation has now deteriorated. If rains return to the region within a week or two, there was probably not much harm done, but if the rains do not materialize, yield losses could occur. The states that could use additional moisture include: Bahia, eastern Goias, Tocantins, Maranhao, and Piaui. This area encompasses a little more than 10% of Brazil's soybean acreage.

Brazil Corn - The situation of the full-season corn in southern Brazil is a little mixed. In the states of Minas Gerais and Parana, the full-season corn is expected to do fine, but there are problems with the full-season corn in parts of Rio Grande do Sul. The president of the Corn Producers Association of Rio Grande do Sul (Apromilho-RS), indicates that earlier dry weather in the northwestern part of the state has negatively impacted the corn crop. The dry weather hit just as the crop was setting the ears and starting to pollinate.

Apromilho-RS estimates that the corn yields in the state may be down as much as 10% to 50% depending on location and statewide, the corn yields will be down 15% from their initial estimate of 130 sacks/ha (120 bu/ac). They now feel that their initial estimate of 5.5 million tons of corn production in the state is too optimistic. Irrigated corn is expected to do very well because of the abundant sunshine, but not well enough to compensate for the losses in the dry areas.

The current price of corn in Rio Grande do Sul is R$ 35.00 per sack (approximately $4.60 per bushel), but that is expected to decline as the harvest gets underway over the next several weeks. Farmers in Rio Grande do Sul have forward contracted 10% to 15% of their anticipated corn production with some farmers selling their corn for as much as R$ 45.00 per sack or approximately $6.00 per bushel.

Two-thirds of Brazil's corn will be safrinha production and with the early soybean harvest getting started in Mato Grosso, we should start hearing about the first safrinha corn being planted in the state probably by next week. December has been a very wet month in Mato Grosso, so there is ample soil moisture for early corn germination.