Brazil Hot and Dry, Early Soybean Yields Disappoint

Mother Nature is taking her toll on one of U.S. farmers’ biggest rivals, Brazil.  Corn and soybean yields are suffering as rain continues to evade parts of the country.

“The weather in Brazil continues to be drier than normal and hotter than normal,” said Dr. Michael Cordonnier of Soybean and Corn Advisor, to AgriTalk host Chip Flory. “This is just not a typical summer rainy season—rains have been too scattered, the coverage too uneven and I think the major concern now is shifting into northeastern Brazil.”

The northeastern corner of the country represents about 12% of total soybean production and weather forecasts aren’t favorable for the crop. Farmers in Brazil are about 6% harvested to date, and early yields have been nothing short of disappointing.

“Brazil now forecasts lower yields than last year, and I lowered my [total] estimate this week 15 million tons,” Cordonnier said. “If this pattern doesn’t change I think it’s going to get worse.”

He pegs the country’s total soybean production at 110 million tons minimum. Last year Brazil produced 119.5 million tons. Until about November his, and others’, forecasts pegged soybeans at 120 million tons or higher.

“End of November it started getting dry and December was very dry,” he added. “The early maturing beans were impacted the most. Now they’re harvesting the medium maturities and a report this morning says yields aren’t much better for the medium maturities.”

The country’s only hope for salvaging some yield lies in late maturing soybeans—but that all relies on Mother Nature turning on the spigot.

Brazil needs a good harvest. Cordonnier said by Feb. 15, 50% of soybeans will be harvested and give global traders a better idea of what’s available. Because of trade disputes and premiums over the Chicago Board of Trade, many Brazilian farmers wiped bins clean to send soybeans to China.

“They swept bins clean,” he said. “At one point they were just shy of a $3 per bu. premium over Chicago for beans out of Brazil—they sold everything they had.”

Contrary to Brazil, Argentina’s harvest is shaping up to be a good one. There are a few spots of over-saturation but overall the crop looks good.