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September 18, 2020

Soy Planting has Started in Mato Grosso for Farmers with Irrigation

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

The planting of the 2020/21 soybeans in the state of Mato Grosso has begun for farmers who have irrigation capabilities. The soybean-free period ended on September 15th, so farmers may now start planting their soybeans if they so choose, but only farmers with irrigation have started to plant.

The municipality of Sorriso, which is located in central Mato Grosso, is the largest soybean producing municipality in Brazil, but only approximately 5% of the 620,000 hectares of soybeans in the municipality are irrigated. The President of the Rural Syndicate of Sorriso estimates that 1% of the soybeans in the municipality have been planted.

For the 95% of the farmers who do not have irrigation, they will wait until they receive 30 to 50 mm of precipitation (1.2 to 2.0 inches) before they start planting. After 4-5 months of hot and dry weather, they need that much moisture to insure germination and stand establishment. The forecast for the region is calling for rain chances to increase between September 20th to 25th.

Even if they wait for the first good rain before they start to plant, there is still the risk that the second rain might be delayed for several weeks which could result in low plant populations and the need to replant some of the soybeans. Therefore, the Syndicate is warning its members to be very careful when they start planting because the soybean seed supply is very tight and if they have to replant, they may not be able to find additional seed of their favorite variety.

Farmers in the municipality have been very aggressive in forward contracting their anticipated 2020/21 production. The Syndicate estimates that its members have forward contracted as much as 70% of their anticipated soybean production and 60% of their anticipated safrinha corn production.

The President sees two problems with this aggressive approach. First of all, the vast majority of these sales occurred when soybean and corn prices were lower than the current prices. With only a small percentage of their crop left to sell, farmers may miss the opportunity to sell at higher prices.

Second, if there are weather problems this growing season, farmers may not produce enough grain to meet their contract commitments. If that were to occur, they would then be forced to purchase more expensive grain in order to fulfill their contracts for grain they sold at lower prices.

Meteorologists are warning farmers to be careful because of the developing moderate La Nina which could result in dryer than normal conditions in South America over the next several months.