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October 7, 2020

2020/21 Brazil Soybeans 1.6% Planted, Average is 4.5%

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

The 2020 Brazilian soybean production was left unchanged at 132.0 million tons and I have a neutral bias going forward. Even though the soybean planting is delayed, it is too early to be talking about potential lower yields. It is not too early though to be talking about delayed soybean exports out of Brazil early next year.

It continues to be a slower than normal start to the soybean planting in Brazil. Nationwide, 1.6% of the Brazilian soybeans have been planted compared to 4.5% average, according to AgRural. Dry weather is the cause of the delay especially in central Brazil.

A delayed start to soybean planting in Brazil does not necessarily mean the potential soybean yields will be negatively impacted. The soybean planting season in Brazil is very forgiving as long as the weather cooperates during the remainder of the growing season. The bigger concern for the soybeans is if the La Nina weather pattern results in dry periods during pod filling.

What we do know about the delayed planting is that it will delay the onset of Brazil's 2020/21 soybean exports and it will also delay the planting of the safrinha corn. Both of those could impact the market. The carryover stocks of both soybeans and corn in Brazil are extremely tight and these planting delays could make it even worse.

Last January, the farmers in Mato Grosso had harvested 25% of their soybeans by the end of the month. That is not going to be repeated in January of 2021. Therefore, as we have been writing for several weeks, the start of Brazil's soybean exports early next year will be delayed by at least three weeks or more.

Mato Grosso - There were scattered rains across the state two weeks ago, but hot and dry weather returned to most of the state last week. The forecast is calling for rain chances to pick up in the state later this week. The Mato Grosso Institute of Agricultural Economics (Imea) reported that 1.7% of the state's soybeans had been planted as of late last week compared to 6.6% last year. The most advanced planting is in the western part of the state where 3.9% of the soybeans have been planted. Many of the soybeans planted thus far in the state are irrigated.

This is the slowest start to soybean planting in Mato Grosso in five years. Many of the farmers who "jumped the gun" and started planting in dry soil in anticipation of rain have now stopped planting and they won't resume planting until they receive at least 1 to 2 inches of rain or more. Some of those early planted soybeans may have to be replanted.

In the municipality of Claudia, which is located in northern Mato Grosso, most farmers have not received enough rain to start planting. There are some rains in the forecast for this week and most farmers feel they will start planting their soybeans by about October 15th. This is later than what they would like, but planting in October would still allow for good soybean yields and enough time to plant safrinha corn.

Farmers have already forward contracted about 70% of their anticipated soybean production. The President of the local Rural Syndicate is advising framers that if they start planting without adequate soil moisture, they could be forced to replant, which may account for as much as 50% of their production costs. Additionally, with so much of their anticipated production already sold, their crop must be planted as well as possible to insure a good production.

The forecast over the next 30 days is calling for 25 to 50 mm of rainfall over most of the state (1 to 2 inches) with some areas of far northern Mato Grosso receiving as much as 100 mm (4 inches).

One problem with the delayed onset of soybean planting means that a higher than normal percentage of the soybeans will be planted in a narrow window, which could have implications at harvest time. If there is intense and prolonged rainfall when the soybeans are mature and ready for harvest, it can have a negative impact on yields and the quality of the soybeans.

In order to minimize the risk, farmers usually plant different maturity soybeans at different times so that not all the soybeans are maturing at the same time. With a concentrated planting window this year, that may be harder for farmers to do. Imea is expecting farmer in Mato Grosso to plant 10.2 million hectares of soybeans with a production of 35.18 million tons.

Parana - As of earlier last week, the Department of Rural Economics (Deral) reported that farmers in Parana had planted 3% of their 2020/21 soybeans compared to 10% a year earlier. Dry weather has slowed the initial planting compared to last year. There were good rains across the southern part of Parana last week, which should encourage farmers to accelerate their soybean planting

In the municipality of Pato Branco, which is located in southern Parana, after receiving 25 to 30 mm of precipitation (1 to 1.2 inches), farmers had planted approximately 12% of the soybeans as of earlier last week. Farmers in the municipality are also actively harvesting their winter wheat and reporting yields of 60 to 70 sacks per hectare (53 to 62 bu/ac), which are lower than anticipated due to previously dry weather and several earlier frosts.

Had the start of the rains not been delayed, farmers in Pato Branco would have finished planting their soybeans by this date, which would have guaranteed that the safrinha corn would be planted in January. As it stands now, only about 12% of the soybeans will be harvested in time to plant the safrinha corn in January, which is the best time to plant safrinha corn. The price of corn is record high in Brazil, so farmers will be willing to plant their safrinha corn later than normal even if it means sacrificing a few bushels of yield.

The wheat harvest in Parana is 63% compared to 44% last week and 70% in 2019. All of the wheat acreage in Parana will be followed by a crop of soybeans.

Conab will issue their first monthly Crop Report concerning the 2020/21 growing season on Thursday, October 8th. They will give their first estimate concerning the soybean and full-season corn acreage as well as yields, but they will carry forward last year's safrinha corn acreage. They will not estimate the 2020/21 safrinha corn acreage until the February Crop Report.