Dec 14, 2017

Dryness Impacting Paraguay Soybeans, Uruguay also Worried

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

With the forecast for a dryer than normal summer in northern Argentina and southern Brazil caused by La Nina, farmers in Paraguay and Uruguay are also paying close attention to the forecast as well. Both of these countries are in the zone where the weather has turned dryer over the last several weeks.

Paraguay - Most of the soybeans in Paraguay are produced in the southeastern region of the country, which is just across the border from northern Argentina and southern Brazil. In Paraguay, they are allowed to start planting soybeans earlier than in Brazil, so the soybean planting in Paraguay ended weeks ago.

The earliest planted soybeans in Paraguay are maturing and a few fields have already been harvested with very low yields being reported. Some reports have yields down by 50% compared to recent years. In the hardest hit areas, it has been 20-25 days with rain, just when the crop was filling pods.

There are reports of soybeans dying prematurely due to the dry conditions and the situation will probably get worse since there is little rain in the near term forecast. Some early yields are in the range of 1,000 to 1,500 kg/ha (14.5 to 21.7 bu/ac). In recent years, the average nationwide soybean yield has been in the range of 3,000 kg/ha (43.5 bu/ac).

Another potential problem in Paraguay could be the safrinha soybeans and the safrinha corn. Farmers in Paraguay are allowed to plant a second crop of soybeans after the first crop is harvested. These safrinha soybeans are generally planted during January, weather permitting. If the current dryness persists until January, there may be some trouble getting the safrinha soybeans planted as well as the safrinha corn.

My current estimate for the 2017/18 soybean production in Paraguay is 10.0 million tons and I have a neutral to lower bias going forward.

Uruguay - Most of the soybeans in Uruguay are planted in two regions - in the northern part of the country along the border with Rio Grande do Sul, Brazil and in the western part of the country across the Uruguay River from Entre Rios in Argentina. The conditions at both locations have been getting dryer for a number of weeks. In some areas, it has deteriorated to the point that soybean planting has been suspended while farmers wait for additional moisture.

Soybeans planted in Uruguay by mid-November did fine with adequate plant populations. Soybeans planted after mid-November are in urgent need of moisture to insure germination and stand establishment. If they don't receive good rains in Uruguay by the end of December, the soybean situation in Uruguay could get complicated.

My current estimate for the 2017/18 soybean production in Uruguay is 3.0 million tons and I have a neutral to lower bias going forward.