Sep 26, 2018

2018/19 Brazilian Soybean Planting off to a Strong Start

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

Planting of the 2018/19 Brazilian soybean crop is off to a fast start. Farmers in Parana started planting their soybeans as soon as they were allowed on September 11th and in Mato Grosso they started on September 16th. The amount of soil moisture is always the key factor determining when farmers in Brazil start planting their soybeans.

In southern Brazil, there has been adequate rainfall to insure germination and stand establishment. In the state of Parana for example, they have been receiving rain since early September as compared to last year when the first rain occurred on September 28th. Scattered showers have also occurred in the state of Mato Grosso, Mato Grosso do Sul, Sao Paulo, and to a lesser degree in Goias, and Minas Gerais.

The forecast for this week is calling for more showers in southern Brazil and in western and central Mato Grosso. This week should remain generally dry in eastern Brazil including Goias, much of Minas Gerais, and Northeastern Brazil. The major meteorological firms in Brazil are forecasting irregular rains during October in central Brazil and eastern Brazil. They are forecasting normal to above normal rainfall during October in southern Brazil.

According to AgRural, the soybean planting in Brazil at the end of last week was 1.9% compared to 0.3% for the 5-year average. Soybean planting in the state of Parana, which is the second largest soybean producing state in Brazil, is at a record fast pace. AgRural estimated that 11.2% of the soybeans had been planted last week compared to 1.7% last year and 1.9% for the 5-year average. This is the fastest planting pace in Parana since AgRural started tracking the Brazilian planting 12 years ago. The soybean planting in Parana is about 2-3 weeks earlier than last year.

Soybean planting in Mato Grosso, which is the largest soybean producing state in Brazil, has started off at a more normal pace. The Mato Grosso Institute of Agricultural Economics (Imea) reported last Friday that 0.8% of the soybeans had been planted compared to the 0.1% planted last year. The most advanced soybean planting is in the western part of the state where 1.6% of the soybeans have been planted. The pace should pick up in Mato Grosso now that parts of the state has received scattered showers.

Early soybean planting in Brazil does not guarantee high yields, but it has a lot of benefits for Brazilian farmers as well as an impact on the soybean and corn markets in general.

Early planting means early harvest - Farmers in Brazil plant their earliest maturing soybeans first. These early maturing soybeans are generally about 95-day maturity, so if they are planted on September 15th for example, they will be mature at about the end of December or early January. The soybean harvest could be accelerated even more with the use of a desiccant. If a desiccant is applied when the leaves start to turn yellow, the leaves drop off, the stems dry out and the crop will be ready to harvest in 7-10 days after application. The use of a desiccant can accelerate the soybean harvest by 1-2 weeks.

Brazilian farmers like to plant different maturity soybeans in order to spread out the risks of not having all their soybeans mature at the same time. The early maturity soybeans mature in about 95 days, the medium maturity soybeans mature in about 110 days and the late maturity soybeans mature in about 120 days. The breakdown of maturities is maybe 40% early maturity, 30% medium maturity, and 30% late maturity, but that depends of the individual farmer and the region of Brazil.

If a farmer planted only early maturity soybeans, he would run a tremendous risk of trying to harvest his soybeans during the peak of the rainy season, which is generally the month of January. During the peak of the rainy season in central Brazil, there may be a several week period of heavy overcast skies with intermittent rains throughout the day. Under those hot and humid conditions, mature soybeans can quickly mold or even sprout in the pods resulting in very significant losses.

Brazilian farmers want to harvest some of their soybeans early because there is a premium in the market for early delivered soybeans. That may especially be the case this year due to the demand for soybeans from China and the fact that Brazil may essentially run out of soybeans before the new crop is harvested.

Early soybean harvesting means an early start to soybean exports - In a typical year, the first vessel loaded with new crop soybeans generally leaves Brazil during the last week of January and then exports start to ramp up in February. In January of 2019, the first vessels may leave Brazil maybe during the third week of January. Normally, the first planted soybeans are in the state of Mato Grosso, and since the state is much further away from export facilities, it takes a longer time for the soybeans to reach the ports.

This year, the first planted soybeans are in the state of Parana, which is only a few hundred kilometers from the Port of Paranagua as compared to central Mato Grosso which is as much as 2,000 kilometers from the Ports of Paranagua and Santos. Additionally, the start of soybean planting in Parana was moved ahead by 5 days to September 11th. The change started during the 2017/18 growing season, but since the weather was very dry last September, the earlier start to planting ended up being a non-issue last year. That is not the case this year, so the earlier planting date is probably going to result in an early start to exports.

Early soybean harvesting means an early start to safrinha corn planting - The planting date is extremely important for a successful safrinha corn crop. In Mato Grosso, which is the largest safrinha corn producing state in Brazil, the ideal planting window for safrinha corn closes about February 20th. If the corn is planted past that date, it runs the risk of low yields due the fact that it runs out of water before the crop is mature. That is exactly what happened in 2017/18 and the result was a very disappointing safrinha corn crop in Mato Grosso.

The ideal planting window for safrinha corn planting in Parana, which is the second largest producing state, closes about March 10th. Corn that is planted past that date runs the risk of dry weather and potential frost damage before the crop is mature. That is what happened in 2017/18, and the state also produced a very disappointing safrinha corn crop.

The two main factors that determine the safrinha corn acreage in Brazil are the planting date and the price of corn. Right now, it looks like the planting date could be early for the safrinha corn and the current corn prices are generally quite good in Brazil. If these two factors continue to be in play over the next few months, Brazilian farmers may plant more safrinha corn than is currently estimated.