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November 10, 2020

Brazil Soybeans Over Half Planted, Dryness Still a Concern

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

I think it is too early to be significantly adjusting the 2020/21 Brazilian soybean estimate, but it is not too early to be concerned about potential adverse weather resulting from a strengthening La Nina which is currently bordering on moderate-to-strong. Meteorologists in Brazil are forecasting dryer than normal weather for November, December, and January for much of Brazil especially southern Brazil.

There was rain last week in the far northern Brazil and northeastern Brazil, but it was generally dry across most of the production areas. The forecast for this week is for rain in parts of southern Brazil with less than normal amounts of rainfall in central Brazil. The forecast for next week is dryer in southern Brazil and wetter in northern Brazil.

Brazil has planted 56% of their 2020/21 soybeans compared to 58% last year according to AgRural. The first half of the soybean crop was planted several weeks later than normal while the second half of the crop will probably end up being planted about on time.

The fact that the first half was planted late is going to be important for the safrinha corn and the start of Brazil's soybean exports. Farmers in Brazil had already decided to reduce their safrinha cotton acreage by at least 10% or more in favor of safrinha corn due to mediocre cotton prices and record high corn prices. The delay in soybean planting will force a delay in planting the safrinha cotton which might lead to even less safrinha cotton and more safrinha corn.

The safrinha corn is going to be planted later than normal, but Brazilian farmers have indicated that may be willing to plant their corn later than normal due to the record high domestic corn prices.

Mato Grosso Soybeans - Farmers in Mato Grosso had planted 83% of their 2020/21 soybeans as of late last week compared to 91% last year and 81% average according to the Mato Grosso Institute of Agricultural Economics (Imea). This represents an advance of 29% for the week. The western part of the state is most advanced at 91% planted and the south-central is the slowest at 72%

Municipality of Sorriso - The municipality of Sorriso, which is located in central Mato Grosso, is the largest soybean producing municipality in Brazil with 620,000 hectares of soybeans. After a slow start to planting due to dry conditions, the soybeans are now over 90% planted and planting should be completed this week. The slow start resulted in a more concentrated planting period this year which will result in a more concentrated harvest period as well.

Generally, the soybean harvest in the municipality starts about January 15th and is completed by the end of February. Due to the late start this year, the harvest will be concentrated during February raising concerns about potential damage if there is wet weather during harvest.

Farmers in the municipality have already sold approximately 70% of their anticipated soybean production. Historically, soybean prices are in the range of R$ 70 to R$ 80 per sack (approximately $5.90 to $6.75 per bushel). The breakeven price is generally considered about R$ 70 per sack (roughly about $6.00 per bushel). Last year at this time the soybean price was R$ 73 per sack (approximately $6.15 per bushel). The current soybean spot price is R$ 166 per sack (approximately $13.80 per bushel), but farmers have already sold 99% of last year's soybean production.

Municipality of Sapezal - In the municipality of Sapezal, which is located in western Mato Grosso, the dryer than normal start to the growing season has farmers concerned about their soybeans and their second crop of corn or cotton. The soybeans are over 90% planted, but some of the soybeans will need to be replanted when the soil moisture improves. Many areas in the municipality have been dry for over 25 days and the result has been poor germination and low plant populations.

Farmers in the municipality are already concerned that they will miss the ideal planting window for safrinha cotton and for safrinha corn as well. They would like to have the cotton planted by the end of January and the corn planted by mid-February. Farmers have indicated that they may be forced to delay planting safrinha corn until sometime in March, but they are willing to plant their corn later than normal due to the record high corn prices.

Municipality of Campo Novo do Parecis - In the municipality of Campo Novo do Parecis, which is located in western Mato Grosso, farmers may have to replant 2-3% of the soybeans due to poor plant populations caused by dry weather. Some farmers who wanted to plant safrinha cotton went ahead and planted their soybeans "in the dust" in the hope of getting ahead of the rain. It did not work out very well and now some of those fields will need to be replanted.

Parana Soybeans - The soybeans in Parana were 61% planted as of earlier last week according to the Department of Rural Economics (Deral). The soybeans are 53% germinating and 47% in vegetative development and they are rated 1% poor, 16% average, and 83% good.

Rio Grande do Sul Soybeans - Farmers in Rio Grande do Sul had planted 17% of their soybeans as of late last week compared to 16% last year and 18% average according to Emater. This represents an advance of 10% from the prior week. Some areas of the state had enough soil moisture to encourage farmers to plant their soybeans while planting remained suspended in other areas. Some soybeans planted in October will have to be replanted due to poor plant populations.