By Alastair Stewart
DTN South America Correspondent
NOVA XAVANTINA, Brazil (DTN) -- For many Brazilian farmers, this soybean season has been difficult with dry weather hampering planting and early crop development in the Cerrado and then incessant rain threatening to spoil the crop during harvesting in the south.
But with the crop around 40% harvested, it appears Brazil has navigated these difficulties and will produce another record crop of around 100 million metric tons.
"Record yields in Rio Grande do Sul and good returns in other southern states will likely offset losses elsewhere," explained Fabio Meneghin, grain analyst at Agroconsult, a Brazilian consultancy.
Farmers greatly benefitted from a major devaluation of the Brazilian real -- it lost a third against the U.S. dollar in 2015. This alone pushed soybean margins into positive territory and prompted farmers to expand soybean area by around 3.5% to around 82 million acres.
However, the season did not start smoothly with elevated El Nino activity likely causing the late arrival of summer rains, which delayed planting by anything between a couple of weeks and a month in Mato Grosso.
When rains returned in northern and eastern Mato Grosso, they were erratic.
"We planted early soybeans following rains in October, but then the rain stopped in November and December and the crops suffered," said Alexandre Di Domenico, who manages 22,000 acres in Querencia, a municipality in eastern Mato Grosso.
Rains returned, but early yields are below expectations, he said.
It was anticipated that later soybeans, nourished by rains in January and early February, would offset poor early results, but that enthusiasm was partially dampened by a two-to-three week dry spell that only broke last weekend.
While eastern Mato Grosso accounts for only around 5% of Brazilian production, the problem was something very similar to what was happening in the center-north of the state, which produces around 10%.
One imponderable remains the weather in the frontier northeastern states of Piaui, Tocantins and Maranhao, where harvest efforts are just starting in many regions that haven't received rain in a month.
But on the positive side of the ledger, things are looking pretty good in the south.
ABOVE-AVERAGE RAINS HELP SOUTH
El Nino has brought above-average rains since the start of the season in October.
As a result, Rio Grande do Sul, the No. 3 soy state in the deep south, is expected to average yields of more than 3 metric tons per hectare (45 bushels per acre) for the first time in its history, despite a recent dry spell in the top-producing north of the state.
Meanwhile, further up in Parana, with over 50% of the harvest complete, yields are on a par with 2014-15's excellent returns.
Heavy rain over the last few weeks is hampering harvest efforts and affecting quality in the north of the state. Rain on desiccated beans has damaged up to 20% of recently harvested beans in Apucarana, a municipality in northern Parana, according to Claudomiro Rodrigues, head of the farm union there. But analysts do not seem to see this as a widespread problem.
Estimates for the Brazilian soybean crop have risen in recent weeks. Agroconsult raised its forecast to 101.6 mmt, up 4.5% on the year before, while Informa increased its forecast to 101.3 mmt.
These figures will likely decline a little with the end-of-cycle difficulties, but not greatly.
Alastair Stewart can be reached at alastair.stewart@dtn.com
(ES/AG/CZ)
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