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 inches, 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 a need for more rain for the beans in the final stretch of harvest.
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
fewer purchases from Brazil.
On
the other hand, during the National Soybean Summit held during the Expodireto
Cotrijal, a farm show in the 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 a
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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