BLOG | Parched Brazilian Soybean Fields May Still Yield a Record Crop – Bloomberg

Parched Brazilian Soybean Fields May Still Yield a Record Crop – Bloomberg

23 de novembro 2020 |

 

 

Despite drought made worse by a La Nina weather system, Brazil’s next soybean harvest may still be a record as farmers have planted crops more widely.

Abnormally dry weather in Brazil has helped push soybean prices to a six-year high on concern that supply will be reduced at the same time China is on a buying spree. But local analysts and farmers say there’s still time for the crop to improve.

While the season’s start has been “very unusual,” Brazil still may see a bigger crop than in 2019-20, when the world’s top exporter reaped 125 million metric tons, according to Daniele Siqueira, an analyst at AgRural.

The firm sees the crop at 132.2 million tons based on trend-line yield projections and an area increase of 3.6%, and it will wait to see the weather behavior in the coming weeks to make adjustments. With most of the beans germinating and at vegetative stage, there’s time for a recovery.

The delays in planting may result in a late harvest, which means China will need to buy soybeans from the U.S for longer than usual at the beginning of 2021.

“I still think there’s opportunity to raise a good crop in Brazil and the transition will happen somewhere in the middle of the first quarter from a U.S. export focused to a more Brazil export focus,” Greg Morris, president of Archer-Daniel-Midland Co.’s Ag Services and Oilseeds division.

 

Irregular Rain

In Central Brazil, rains have been irregular, while the southern parts of the country have been dry as well. The conditions had caused an unusual seeding delay, but even once in the ground soybeans still aren’t getting enough moisture for appropriate development in key growing regions, leading some farmers to replant.

“It’s too early to say we’ll have losses, but the problem exists and is huge,” said Antonio Galvan, head of the farmers group Aprosoja in Mato Grosso. “It will be hard to reach similar yields compared with the past season, when the state reached a record.“

In Mato Grosso, the top-producing state, irregular and below-average rains haven’t been enough to ensure a regular development of the crops, according to Alexandre Inacio, a director at ARC Mercosul, a branch of the Chicago-based AgResource, which sees the crop at 130 million tons.

A similar situation has been seen further south. In Parana, where planting is almost finished, crop conditions have deteriorated, while in Rio Grande do Sul farmers haven’t been able to proceed with seeding due to low soil moisture. Planting from the second half of December is risky, according to Rogerio Mazzardo, a manager at the state’s agriculture agency Emater.

“But if conditions improve, allowing seeding in the coming weeks, and remain favorable, we still can get a satisfactory average yield,” Mazzardo said.

The state may get some rain later next week and into the first half of December, but it should begin to dry out after that, Don Keeney, senior agricultural meteorologist at Maxar in Gaithersburg, Maryland, said by email.

Located in the far south, at the border with Argentina, Rio Grande do Sul carries the highest concern for the coming months as La Nina may cause below-average rains, according to Celso Oliveira, a meteorologist at Somar Meteorologia in Sao Paulo. In most of the nation, including Mato Grosso, precipitation is expected to turn more regular from now on, he said.

Patchy rains in Argentina are helping farmers to get beans in the ground, but planting is still delayed compared with the usual for this time of the year because fields are dry, according to the Buenos Aires Grain Exchange.

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