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March 17, 2020

Soybean Estimates Continue to Decline in Rio Grande do Sul

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

Hot and dry weather has taken a toll on the soybean crop in the state of Rio Grande do Sul in southern Brazil. In their March Report released last week, Conab estimated that Rio Grande do Sul would produce 16.9 million tons of soybeans, but local officials in the state have already lowered their estimate to 13.3 million tons and they stated that without significant rainfall in the very near future, their estimate could decline further to maybe 10 million tons.

Brazilian TV and farm shows are full of stories about the situation in the state and the fact that at least 10,000 producers have already communicated with state insurance officials that they will suffer significant losses on their soybeans. Farm groups are asking state officials to declare an emergency in order for producers to qualify for breaks on their production loans, etc.

Some of the losses in Rio Grande do Sul will be compensated for by potentially record soybean yields in northern and northeastern Brazil, but there is a possibility that Brazil might not set a new soybean production record surpassing the old record of 122.0 million tons (USDA estimate) set in 2017/18.

The soybeans in Brazil were 62.8% harvested last week compared to 62.6% average according to Arc Mercosul. This represents an advance of 10% for the week. Dry weather last week allowed for rapid harvest progress in the states of Mato Grosso do Sul, Goias, and Minas Gerais. The state of Mato Grosso is nearly finished harvesting soybeans at 96.8% complete and Parana is 68% complete.

Mato Grosso - The Mato Grosso Institute of Agricultural Economics (Imea) reported last Friday that 96.8% of the soybeans in the state had been harvested compared to 97.2% last year and 87.9% average. This represented an advance of 5.3% for the week and the soybean harvest in Mato Grosso is wrapping up about two weeks earlier than average.

Parana - The Department of Rural Economics (Deral) reported that the soybeans in Parana were 68% harvested earlier last week.

Rio Grande do Sul - The state of Rio Grande do Sul continues to suffer from hot and dry conditions and as a result, the soybean yield estimates continue to decline (see next article). There were a few light showers in the state over the weekend, but not enough to reverse the situation. The soybean in Rio Grande do Sul are about 10% harvested.

Maranhao - According to the President of the Soybean & Corn Producers Association of Maranhao, approximately 30% of the soybeans in the state have been harvested with an average yield of about 47 sacks per hectare (41.7 bu/ac). He is expecting the average yield to increase to 52 sacks per hectare (46.1 bu/ac) as the harvest progresses to the later maturing soybeans. Maranhao is the second largest soybean producing state in northeastern Brazil after the state of Bahia.

Farmers in the state have sold 80% of their anticipated 2019/20 production for prices in the range of R$ 82 to R$ 85 per sack (approximately $9.00 to $9.20 per bushel). Farmers have also forward contracted as much as 20% of their 2020/21 production.