Oct 16, 2017
2017 Brazilian Wheat Crop Disappoints Once Again
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Brazilian farmers are once again struggling with their winter wheat crop. In their October Crop Report, Conab estimated the 2017 Brazilian wheat crop at 4.8 million tons, which is down 27% from the 6.7 million tons produced in 2016. The reason for the disappointing crop is adverse weather throughout the entire growing season. The weather was too dry early in the growing season then they had a series of frosts and now it is too wet as the crop is being harvested.
As a result, Brazil will need to import at least 7 million tons of wheat if not more depending the quality of the wheat being harvested. Most of those imports will come from Argentina, but the Argentine wheat crop is also disappointing. Traditionally, Brazil imports some of its wheat from Paraguay, but the Paraguayan wheat crop suffered from the same problems as in Brazil and Paraguay is not expected to have any wheat to export. In fact, they may have to import wheat to meet domestic demand.
In Brazil, Parana is the largest wheat producing state and the crop in Parana is 77% harvested according to the Department of Rural Economics (Deral). The wheat remaining to be harvested is 11% flowering, 43% filling grain, 46% maturing and it is rated 20% poor, 45% average, and 35% good. The wheat remaining to be harvested is expected to be low yielding and low quality. The best quality wheat in the state was the early harvested crop.
Rio Grande do Sul is the other large wheat producing state in Brazil and the crop is 3% in vegetative development, 15% flowering, 60% filling grain, and 20% mature. In some areas the wheat is 10% harvested and early yield reports from the state are disappointing with low yields and poor quality. The crop is expected to deteriorate even further due to the recent heavy rains and strong winds and the forecast for even more rainfall over the next few weeks.
Grain companies in the state are not even offering a price for new crop wheat, which will force farmers to store their wheat. I suspect that a significant percentage of the crop will only be used for feed wheat, which would force Brazilian millers to import even more high quality wheat. Other small grains in the state such as barley, oats, and canola are also expected to be disappointing. Farmers are anxious to harvest their wheat so they can proceed to planting their main crop which is soybeans.