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December 13, 2017

Soybean Planting nears Completion in Brazil

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

Brazil Soybeans - The soybeans in Brazil are approximately 96% planted with just a few soybeans left to plant in Rio Grande do Sul in southern Brazil and in northeastern Brazil. The five-year average is 93% planted.

Central and eastern Brazil have been receiving very good rains since early November and the forecast is calling for more of the same. I think it has been especially good in northeastern Brazil given the fact that this is generally the driest area of Brazil.

The current situation in southern Brazil is OK and it may get worse if the current dry pattern persists going forward, but that is not a certainty. What we do know for sure is that the situation in central Brazil is very good as the soybeans start to flower and set pods. I would estimate that approximately 60% of the Brazilian soybean crop could end up doing fine and that 40% of the crop could face dryness problems in the future if the current dry pattern persists.

Soybeans in Brazil can be planted later than normal and still do fine if the weather cooperates. Thus far, I would say the weather has cooperated for the majority of the soybean crop, so for the time being, I think the benefits in central Brazil are more than compensating for potential future problems in southern Brazil. There is some concern about too much rain and a lack of sunshine in central Brazil and that may be a future problem if it stays cloudy during pod filling.

The soybean crop in Mato Grosso is essentially completely planted and the crop is now starting to flower and set pods for the most part. One potential future problem for soybeans in Mato Grosso is that the planting this year was more concentrated than normal. An example is the municipality of Canarana in eastern Mato Grosso.

Due to a dry start, the planting in Canarana occurred over a short period of time and that could be a problem at harvest. The main problem at harvest in Mato Grosso is too much rain. If all the crop is ready to harvest at the same time and a period of wet weather sets in for several weeks, it could result in a lot of poor quality soybeans. That is why farmers in central Brazil like to plant a combination of maturities - short, medium, and long maturities so that all the soybeans won't be mature at the same time.

Farmers in Canarana will need about 52 sacks of soybeans per hectare (45.2 bu/ac) to cover their costs and many think they will harvest in the range of 55 to 60 sacks per hectare (47.8 to 52.2 bu/ac).

The soybeans in Parana are 100% planted as well and the crop is rated 10% average and 90% good. The soybeans in Parana are 1% germinating, 65% in vegetative development, 31% flowering, and 3% setting pods.

Brazil Corn - The full-season corn in Brazil is 95% planted vs. the five-year average of 86%. Conab is currently estimating that the full-season corn will account for 27% of Brazil's total corn production with the safrinha production accounting for the remainder.

Even though the weather in central Brazil has generally been beneficial since early November, the dry weather during September and October delayed the start of the soybean planting, which in turn will delay the planting of the safrinha corn crop. The combination of potential delays in planting the safrinha corn and low corn prices have left many Brazilian farmers cautious concerning their safrinha corn crop.

Farmers in eastern Mato Grosso got a late start to their soybean planting due to dry weather and the late start will also delay the start of the safrinha corn planting as well. As a result of the high costs and low corn prices, farmers have indicated that they will not risk planting their safrinha corn after the ideal planting window closes about the third week of February.

Farmers in the region have done very little forward contracting of their anticipated 2017/18 corn crop due to the prices being offered, which are currently in the range of R$ 17.00 to R$ 18.00 per sack (approximately $2.35 to $2.50 per bushel). Farmers have indicated that they would like to see R$ 20.00 per sack (approximately $2.80 per bushel) before they aggressively start to forward contact their corn.