Brazil started to garner attention over the last 2 to 3 weeks with the talk about the extraordinary dryness in a large part of the country. The driest region is the central and northern portions of their primary producing area. That region accounted for 65 percent of their soybean output last year.
But it is important to understand their climatic pattern. In essence, the central/northern areas have a classic savanna weather pattern, a pattern that has wet and dry seasons. Their dry season starts in April, remaining in place into October. This year, it has been unusually dry, leaving soils extremely parched.
In an average year, Mato Grosso, the big northern state, has 5 percent of the crop planted at this time, with 10 percent planted by Oct. 1. But at this point, we’d be surprised if 5 percent is planted by Oct. 1. That’s the slowest pace in modern times. And, it could easily be less.
In Parana, the second-largest producing state in the southern part of the country, up to 30 percent is usually planted by Oct. 1. Mostly we are only hearing only irrigated fields have been planted. It wouldn’t surprise us if the early pace is only one-half the normal pace. The initial report for that state, dated Sept. 21, indicated planting is only 1 percent complete. That would be the slowest start they’ve had in modern times.
We hear many producers are waiting on a 1- to 3-inch rain, with promise of more on the horizon, before they begin to plant. The extraordinarily slow pace of early planting will push back harvest. One South American analyst has said there will be no soybean harvest in January this year unless rains develop soon, and planting accelerates rapidly.
Extending the U.S. export window
In essence, that will extend the window for the U.S. soybean export campaign this winter. But, Brazil’s large 2017 crop is allowing the country to continue shipping old crop longer than it usually does.
The United States may not see those 100-million-bushel weekly shipments like last fall. But, the country will ship relatively big quantities for a longer period the longer planting is delayed.
The situation has potential implications for corn, too The slower planting of soybeans in the northern producing areas pushes back the harvest of those same crops.
That in turn delays the planting of the second-crop corn. The second crop has become the portion of the crop Brazil exports to the world. Last year, output from the second crop was double the output of the first crop, a crop that’s mostly planted in the south. That is causing their exports to set new records each month.
Two years ago, the late soybean harvest delayed second crop plantings, causing the yield of the second crop corn to drop from the year before, cutting the output by 25 percent. That was the key to large U.S. corn exports this past winter.
But at this writing, it’s important to understand the situation is not yet critical yet. But, it is worth watching. If rains don’t start to develop by mid-October, it will have potential implications for both corn and soybean markets this winter.