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Dry Weather Slows Brazil's Soybean Harvest

Last modified December 14, 2020 11:39

Dry Weather Slows Brazil's Soybean Harvest-By Luis Vieira 3/3/2020

BrazilPORTO ALEGRE, Brazil -- The dry weather has generated a significant soybean harvest delay in at least four Brazilian states.

According to Safras & Mercado, a market advisory firm located in Porto Alegre, the country has harvested 39.6% of a total of 91.4 million acres. In 2019, the harvest progress was at 45% of the surface by the first week of March.

The top producing state, Mato Grosso, leads the works with 80% of the crop harvested, but still faces a delay compared with 2019, when 83% of the soybeans were raised from the fields. The average progress for this period, however, is just 63%.

Last year, planting started earlier, speeding up the growing season, but rain delayed harvest. This year, the four states with significant delays are Mato Grosso do Sul, Goiás, Minas Gerais, and Sao Paulo.

Farmers from the state of Rio Grande do Sul have faced a severe drought, and the soybean harvest is just starting in that southern state. According to Paulo Vargas, a farmer in Carazinho, NW of Rio Grande do Sul, the first material harvested indicates that at least half of the crop would be lost in his town. Yet, if the rains coming in the next two weeks measure just 1.1 inch, there potentially can be a recovery, Vargas says.  

In Bagé, the southern part of Rio Grande do Sul, the yields could be off by 15% vs. 2019, according to local estimates. For Rodrigo Borba, a Bage farmer, there is still need for more rain for the beans in the final stretch of harvest.

“Our situation is not as severe as other farmers’ from other regions of the country because at least the port (of Rio Grande) is closer and therefore our profits are not hurt. I sold 40% of my production already,” says Borba. The overall losses in the state of Rio Grande do Sul were updated to 16.2% in soybeans and 20% in corn.

SOYBEAN DEMAND

Even with a widespread scare about the coronavirus, the demand for Brazilian soybeans by China has been strong. The Brazilian National Association of Cereal Exporters projects that the country will repeat the exports of 2019 with nearly 6 million metric tons shipped to China. In January the sales dropped 60%, in February it dropped 14%,  and in March that would be just 4% less. For the association, the coronavirus has not had a major impact on demand, but the impact is greater from the new U.S. trade agreements with China, resulting in less purchases from Brazil.

On the other hand, during the National Soybean Summit held during the Expodireto Cotrijal, a farm show in Rio Grande do Sul, economist Alexandre Mendonça de Barros, a commodity expert, said the food distribution system is compromised by the coronavirus crisis.

“Full containers are stuck in the Chinese ports stored with product that should go to China’s countryside. The scarcity is likely to bring a rebound in demand to reestablish the stocks in the country,” summarized the economist.

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