TellusLabs Weekly Commentary – March 13, 2018
Prepared by: Michael Cordonnier, Soybean & Corn Advisor, Inc.
Argentina Soybeans - Farmers in Argentina suffered through another dry week last week. There were a few showers over the weekend in southern Buenos Aires and southeastern La Pampa, but they occurred in a relatively narrow band and certainly they were not heavy enough to reverse the overall trend. There was very little rainfall over the weekend in areas that needed it the most and I would categorize the last rainfall event as disappointing once again.
The early planted soybeans are in the midst of filling pods with 62% of the early-planted soybeans filling pods and 16% mature. I expect that a few fields of soybeans will start to be harvested this week and certainly the early harvest will get underway next week. I would characterize the soybeans in Argentina as about 70% early planted and 30% later planted.
When soybeans are filling pods, they generally require about 2 inches of water per week. The water can come from rainfall or from water stored in the soil. Unfortunately, the soil moisture in Argentina is currently rated as approximately 85% short to very short. In some of the dryer areas of central Argentina, they received approximately 2 inches of rainfall in January and 0.1 inches in February.
The later planted soybeans are now 32% setting pods and 6% filling pods. The later planted soybeans in central Argentina have received very little rainfall since they were planted. Some of the later planted soybeans may be abandoned or have very low yields in the range of 20 to 25 bu/ac.
The Buenos Aires Grain Exchange lowered their 2017/18 soybean estimate by 2 million tons last week to 42.0 million. Even though they left the planted acreage unchanged at 18.0 million hectares, they did indicate that the soybean harvested acreage will be down by at least 700,000 hectares or more. I am assuming the lower harvested acreage is a combination of some of the double crop soybeans not being planted and abandonment due to dry conditions. If you assume that all 18.0 million hectares were in fact planted, then loosing 700,000 hectares would equate to 3.8%, which is a reasonable amount given the conditions in the country.
The soybeans in general are rated approximately 75% poor to very poor and the soil moisture is approximately 85% short to very short. A lot of the early planted soybeans are rapidly approaching maturity, so there are only a couple of weeks left in their growing season so every opportunity for rain is critical.
Argentina Corn - The early planted corn in Argentina accounts to approximately 40% of the total corn crop with the later planted corn accounting for 60% of the total. The early planted corn is 53% mature and 6.5% harvested. The soil moisture for the early planted corn is rated as 78% short to very short.
The early corn yields are variable depending on location. In some of the core production areas, the early yields are acceptable in the range of 145 bu/ac. The yields in the more eastern areas where the weather has been dryer are much lower in the range of maybe 75 to 80 bu/ac. The Buenos Aires Grain Exchange is estimating the corn yields thus far as averaging 6,580 kg/ha or 101 bu/ac.
The later planted corn is 84% pollinated and 5% filling grain and the soil moisture for the later planted corn is rated as 93% short to very short. Much of the later planted corn in Argentina has had very little rainfall from planting through pollination. As a result, I think the later planted corn is going to perform worse than the early planted corn.
Brazil Soybeans - The weather in Brazil continues to follow the same pattern - wet in central and eastern Brazil and generally dry in far southern Brazil. The forecast is calling for continued wet conditions across central and eastern Brazil, but there are some additional chances of rainfall in southern Brazil.
The 2017/18 Brazilian soybean crop is 48% harvested compared to 56% last year and 46% for the 5-year average. This represents an advance of 13% for the week. The soybean harvest is wrapping up in parts of western Parana as well as in northern and western Mato Grosso.
The Mato Grosso Institute of Agricultural Economics (Imea) reported that 83% of the soybeans have been harvested in the state. In western Mato Grosso, the soybeans are 98% harvested and they are 95% harvested in the mid-north as well as in northwestern Mato Grosso. The slowest harvesting is in the northeastern region of the state where 55% of the soybeans have been harvested.
In Parana the soybean harvest is 55-60% complete with the harvest wrapping up in parts of western Parana.
Brazil Corn - The full-season corn in Brazil is 28% harvested compared to 36% last year and 37% for the 5-year average. This represents only a 4% advance for the week because Brazilian farmers are putting more emphasis on harvesting their soybeans instead of their corn.
In Conab’s March Crop Report, they increased their estimate for the full-season corn crop from last month by 0.4 million tons to 25.1 million, but even with the increase, the full-season corn crop in Brazil is still 5.3 million less than last year.
According to AgRural, the safrinha corn crop is 81% planted compared to 88% last year and 81% average.
In Mato Grosso, the safrinha corn is 95% planted compared to 96% last year and 98% average. This represents an advance of 11% for the week. The safrinha corn planting in Mato Grosso would be completed this week and the safrinha corn in the state is rated in good condition due to the ample rainfall the state has received.
In the state of Parana the safrinha corn is approximately 80% planted. In Parana and southern Mato Grosso do Sul, farmers would generally not risk planting their corn past March 15th. With the improved corn price, they might extend the planting a little longer, but even with an extension, there is only 7-10 days left in the planting window.
In Conab’s March Crop Report, they reduced their estimate for the safrinha corn crop from last month by 1.1 million tons to 62.1 million, which now puts the crop 5.2 million tons less than last year. I thought the interesting change was that they are now estimating that the safrinha corn acreage will be down 5.9% from last year (-720,000 hectares). In February, they estimated that the safrinha corn acreage would be down 5.6% from last year (-676,000 hectares).
Therefore, in March they estimated the safrinha corn acreage at 11.389 million hectares or 44,000 hectares less than in February. They also reduced their safrinha corn yield estimate by 1.2 bu/ac in the March report from 85.2 bu/ac in February (5,533 kg/ha) to 84.0 bu/ac in March (5,458 kg/ha). For the entire 2017/18 Brazilian corn crop, Conab lowered their estimate 0.8 million tons in March to 87.2 million tons.