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Hopes rise for soybeans in Brazil's top growing state, despite dryness

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Imea raised its forecast for the soybean harvest in Brazil’s top growing state, even as it cautioned over the threat from a dearth of rain – which it saw as actually more of a threat to corn and cotton.

 

The research institute upgraded by nearly 700,000 tonnes, to 35.87m tonnes, its forecast for the 2020-21 soybean harvest in Mato Grosso, which is typically responsible for nearly 30% of Brazilian output of the oilseed.

 

The upgrade took the estimate above the latest, 35.40m-tonne harvest to what would be a record high, and reflected expectations of farmers, enriched by record prices of soybeans and many other crops, raising investment.

 

“The capitalization of the producer after the last harvest, as well as the advance sales of [2020-21] soybeans… justify the increase,” Imea said.

 

Price incentive

Indeed, the institute estimated soybean prices in the state gaining a further 5.3% over the past week to a fresh record high of R$148.84 per 60-kilogramme bag.

 

The gains reflect the dearth of inventories left over from the early-2020 harvest after a bumper export programme, and with strong domestic demand too, against a backdrop of soyoil prices which Cepea has pegged nationally at 18-year highs above R$6,000 per tonne.

 

“Even though domestic soyoil prices have increased significantly, it is still very competitive compared to corn oil or sunflower oil,” said Dr Michael Cordonnier at Soybean and Corn Advisor, noting too a boost to exports thanks to “problems” from rival Argentine crushers thanks to farmer withholding of soybeans.

 

The high soybean prices had tempted Mato Grosso farmers, as of last month, to hedge 55.9% of their 2021 harvest already, a figure up 24.9 points year on year, according to Imea.

 

And with growers having too bought “practically all” crop inputs “already, it is clear that the soybean grower will tend to invest more this year”, signalling enhanced yield prospects, as well as a small increase to area expectations too.

 

Dryness factor

The institute acknowledged that a lack of rains was “hampering sowings progress”, with plantings progress as of Friday, at 1.7% completion, down 4.9 points year on year.

 

Last month, “only 7.78mm of rain were recorded in the state volume 77.59% lower than the five-year average”, Imea said, quoting data from Aproclima /TempoCampo.

 

However, for now, the threat to soybean production looks more in term of a late-running planting period feeding through into a delayed harvest, raising the chances of the crop being damage Mato Grosso’s “intense” summer rains.

 

Corn, cotton risk

However, the dearth of rainfall may prove more significant for safrinha crops, grown as follow-on crops after the soybean harvest early in 2021, rather than the oilseed itself, in limiting the amount of these crops which can be seeded in the ideal planting window.

 

Cotton and corn, stand to “lose the most” from the soybean planting delay, with the fibre possessing a particularly early close to its sowings window.

 

Some farmers are hoping for rains and “sowing soybeans in the dust” to ensure the crop is harvested early enough to guarantee time for safrinha plantings.

 

“However, others will wait for the first rains,” and opt for faster-developing safrinha crops, with later seeding deadlines.

 

The sowings delays in Mato Grosso have been replicated in many other states too, with Agrural on Monday estimating national sowings progress at 1.6% as of October 1, below a five-year average of 4.5% for that date.

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