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January 6, 2021

Weather Improving in Brazil, Early Maturing Soy Disappointing

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

The weather in Brazil has improved, but it is still irregular. The areas where more moisture is needed include far southern Brazil, especially the state of Rio Grande do Sul, as well as northeastern Brazil, especially the state of Bahia. In a normal year, Rio Grande do Sul producers about 15% of Brazil's soybeans and northeastern Brazil produces about 12% of Brazil's soybeans.

Early yield reports from Mato Grosso are not encouraging. The earlier maturing soybeans in the state were impacted by the dryer than normal weather when the crop was flowering and filling pods during November and December. Early reports indicate a 10% or more reduction in yields for the early maturing soybeans compared to what had been expected. The later maturing soybeans will probably do better because of the improved rainfall as the crop moved into its reproductive phase.

Mato Grosso Soybeans - The very early soybean harvest has started in isolated areas of western Mato Grosso (see earlier article), but the main harvest won't start until about January 15th with the harvest pace picking up speed in early February. The soybean harvest in Mato Grosso usually starts in early January and proceeds until about the end of February, but this year, it will be concentrated during the month of February due to the delayed planting.

Rio Grande do Sul Soybeans - Since the soybeans in the state were planted later than normal this year, February is going to be the primary month that will determine the soybean yield in the state. The soil moisture in the state has been declining in recent weeks due to a lack of rainfall with some areas now reporting a moisture deficit of 40% to 50%.

Sao Paulo Soybeans - The president of Aprosoja in the state of Sao Paulo estimates that 10% of the soybeans in the state had to be replanted due to poor plant populations due to dry conditions and that the state's soybean production will be 10% lower than original expectations. Strong soybean prices were the incentive for farmers in the state to increase their soybean acreage by 4.7% to 1.16 million hectares. Conab is estimating that the state will produce 4.04 million tons of soybeans in 2020/21, which is up 2% compared to last year.

Brazil Soybean Planting now Ended - In most states of central Brazil, December 31st marked the end of commercial soybean planting. There are a few exceptions that will allow soybeans to be planted after December 31st including: scientific research, demonstration plots for agricultural fairs, and restricted seed increases. Even with these exceptions, the people responsible for the soybeans must present a detailed plan to state authorities on how they will control soybean rust to prevent the disease from migrating from one growing season to the next.

Brazilian Currency Devalued 29% in 2020 - Brazilian farmers had a very good 2020 with record high prices for many commodities and they can thank their good fortune in a large part to the devaluation of the Brazilian currency. Over the course of 2020, the Brazilian real devalued 29% compared to the U.S. dollar which made Brazilian commodities very competitive in the world market. The Brazilian currency has strengthened somewhat in recent weeks and it is starting 2021 valued at 5.19 reals per dollar.