March 06, 2018

Prepared by: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Argentina Soybeans - The situation in Argentina is bad and getting worse.  I would have to say that Argentina is quickly approaching the “worst case scenario.”  I think it is comparable to the 2012 growing season in the United States with two differences.  The growing season in Argentina started off with good soil moisture during August-September-October, whereas the 2012 growing season in the U.S. started off dryer than normal.  The soils in Argentina hold water very well, so it took a while for the subsoil moisture to be depleted. That is why the early planted corn and soybeans are doing better than the later planted corn and soybeans.  

Another difference is that the temperatures in Argentina have been hot, but not record hot like we saw in the U.S. in 2012.  As a result, the situation in Argentina probably has not been as bad as the 2012 growing season in the U.S, at least up until this point, but I now think the two growing seasons are comparable.

The weather in Argentina has gotten worse as the summer has progressed.  The three summer months (December-January-February) have been the driest in several decades and February has been the driest in many decades.  Last week was hot and dry again with only light scattered showers in the main production areas. There was some rain across the far northern regions of Argentina along the border with Paraguay.  The forecast is calling for a few widely scattered showers this week across the main production areas with a little better rains across the far northern regions again, but there is not enough rain in the forecast to reverse the current trend.  

In their latest weekly report, the Buenos Aires Grain Exchange slashed their estimates for the 2017/18 Argentina soybean estimate by 3.0 million tons to 44.0 million.  The soybean estimate is now 13.5 million tons below last year’s production. The estimate for the 2017/18 Argentine corn crop was left unchanged at 37.0 million tons.

The Grain Exchange is now rating the soybean crop in general as 45.3% very poor, 30.7% poor, 21.1% fair, 2.6% good, and .3% excellent.  The early planted soybeans are rated 72% poor to very poor, whereas the later planted soybeans are rated 85% poor to very poor. The earlier planted soybeans had relatively good weather last September and October, but the later planted soybeans have endured adverse weather ever since they were planted.

The soybeans in general are 35% filling pods and 5% mature, so the next few weeks will be critical for determining the final soybean yield.  The soil moisture for the soybeans is rated 52.9% very short, 34.1% short, 12% favorable, 0.8% optimum, and 0.2% wet.

Argentina Corn - The Buenos Aires Grain Exchange left the 2017/18 Argentina corn estimate unchanged at 37.0 million tons and the corn in general is rated as 42.6% very poor, 33.8% poor, 18.1% fair, 5.5% good, and 0% excellent.  Once again, the earlier planted corn is faring better than the late planted corn. The early corn is rated 68% poor to very poor, whereas the later planted corn is rated 85% poor to very poor.

The earlier planted corn is 46% mature and the later planted corn is 70% pollinated or beyond.  The soil moisture for the corn is rated 54.2% very short, 34.2% short, 11.1% favorable, 0.5% optimum, and 0.1% wet.   

The 2017/18 Argentine corn crop is 3.2% harvested and the early yields are averaging 6,420 kg/ha or 98.8 bu/ac, which is lower than last year and lower than earlier expectations.  The yields of the later corn is currently being determined and if the corn does not receive generous rains in the next week or two, the yield of the later planted corn will be worse than the yields of the earlier corn.  Unfortunately, there is not enough rain in the forecast for most of Argentina to reverse the overall trend. There are some showers in the forecast for far northern Argentina, which could help the later planted corn in that region.

Brazil Soybeans- February was a very wet month in central Brazil, which made it a challenge to harvest soybeans and plant safrinha corn. The weather has been dryer for the last few days, but the forecast is calling for heavy rains to return to central Brazil this week.

According to AgRural, the 2017/18 soybean crop in Brazil is 35% complete compared to 47% last year and 37% for the 5-year average.

In Mato Grosso the soybeans are 71% harvested compared to 78% last year and 71% average.  This represents an advance of 12.5% for the week. The most advanced regions are western Mato Grosso where the harvest is 92% and the mid-north where it is 90%.  The slowest continues to be northeastern Mato Grosso where the soybeans are 38% harvested. The soybean yields in Mato Grosso are good, but not exceptionally high like they were last year.  

In the state of Parana, dryer weather allowed farmers to increase their soybean harvest to 35%, which represents an increase of 11% for the week.  The soybean harvest in Goias is 41%, Mato Grosso do Sul is 39%, and Minas Gerais is 29%. In northeastern Brazil, the soybean harvest is 1-7% complete and the harvest has not yet started in any significant manner in Rio Grande do Sul.  

Brazil Corn - Brazilian farmers are in the midst of harvesting their full-season corn crop and AgRural reported that 24% of the corn has been harvested compared to 29% last year and for the 5-year average.  The full-season corn harvest is most advanced in Rio Grande do Sul where corn yields have been variable.

Planting of the safrinha corn crop is now the focus of attention in Brazil.  AgRural reported that 63% of the safrinha corn has been planted as of last Friday compared to 75% last year and 64% for the 5-year average. Safrinha corn planting in Mato Grosso is doing OK and farmers in Parana made good advances in planting their safrinha corn.  AgRural estimates that 3.9 million hectares of safrinha corn will be planted after March 1st.

The safrinha corn in Mato Grosso is 84% planted compared to 86% last year and 92% for the 5-year average.  The safrinha corn is 94% planted in the mid-north and in northwestern Mato Grosso. In the state of Parana, the safrinha corn planting increased to 56%.  Safrinha corn planting is 58% complete in Goias, 55% in Minas Gerais, 43% in Sao Paulo, and 33% in Mato Grosso do Sul.

The ideal planting windows for safrinha corn in Brazil have long closed and now the question is how long farmers will continue to risk planting their safrinha corn and will they plant all of the intended corn.  There have been two positive developments for the safrinha corn. First of all, the weather has been good for the early vegetative development of the safrinha corn that has been planted. There is no shortage of soil moisture for the corn.  Secondly, corn prices have been rising steadily since about mid-January and that might encourage Brazilian farmers to plant their safrinha corn later than what they normally would.

It has been reported that this year there will be the most ever safrinha corn planted after March 1st in Brazil.  I would agree with that statement especially for the safrinha corn planted outside of the state of Mato Grosso.  The “drop dead” date for planting safrinha corn in Mato Grosso is about March 10th.  In Parana and southern Mato Grosso do Sul, farmers may still try to plant safrinha corn until about March 15th.

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