March 27, 2018

TellusLabs Weekly Commentary – March 27, 2018

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

Argentina Soybeans - As the 2017/18 growing season in Argentina limps to a disappointing end, the overriding question is how low can the crop estimates go?  We won’t know the answer to that question until all the harvest is complete. It is very hard to estimate where the bottom is when Argentina in general has experienced the driest growing season in decades with isolated areas experiencing the driest growing season on over one hundred years.

The hope had been that rain would help some of the later maturing soybeans.  There were some 1-2 inch rains in a narrow band of the core production area 10 days ago, but the coverage was limited.  The rains last week were mainly on the fringes of the principal production areas. Over the weekend there were good rains across far northeastern Argentina and the northern part of Santa Fe.  The forecast for this week does not look promising any meaningful rain across the center of the country.

The soybeans in Argentina are generally rated about 80% poor to very poor with some of the latest planted soybeans rated up to 90% poor to very poor.  The soil moisture is also rated about 90% short to very short.

The soybean crop continues to move closer to maturity with 18% of the total crop now mature.  The earlier planted soybeans are 25% mature, which means that about 50-60% of the crop is turning yellow.  Once the leaves start to turn yellow, there is no more potential yield increase. From that point forward, the seeds simply lose moisture.  The opportunity for rain to help the early maturing soybeans is quickly slipping away. Within 1-2 weeks, the early planted soybeans will be probably be 80% or more turning yellow.  

The later planted soybeans are approximately 30% filling pods, so they could still be helped by rain, but they could also be hurt by an early frost.  A week ago, the temperatures in areas of Cordoba, San Luis, Buenos Aires, and western Santa Fe dropped down to 33°F and the concern is that the low temperatures may have cut short the pod filling process.  Even if it wasn’t a killing frost, this type of weather is not good for a crop that is already stressed due to dry conditions. There are now more concerns of potential frosts with new cold fronts moving up from the south.

Below are some of the yields reported by the Buenos Aires Grain Exchange and the Rosario Grain Exchange.   

  • Entre Rios – 800 to 1,000 kg/ha (11.6 to 14.5 bu/ac)
  • Southern Cordoba – 1,000 to 2,300 kg/ha (14.5 to 33.3 bu/ac)
  • North-central Cordoba – 1,500 to 2,500 kg/ha (21.7 to 36.2 bu/ac)
  • Northern core region – 1,500 to 4,000 kg/ha (21.7 to 58.0 bu/ac)
  • W. Buenos Aires, N. La Pampa – 2,400 to 4,200 kg/ha (34.8 to 60.9 bu/ac)
  • Southern core region – 2,000 to 4,500 kg/ha (29.0 to 65.2 bu/ac)
  • Central core region – peak yield thus far of 5,000 kg/ha (72.5 bu/ac)

Argentina Corn - The problem with the corn estimate is the same as the problem with the soybean estimate.  In a situation such as this, where is the bottom of the estimates? Unfortunately, we will not know the answer to that question until all the corn is harvested.  Probably the last 20% of the corn crop in Argentina will not be harvested until at least the middle of May. The later corn is expected to be lower yielding than the early corn, so the most disappointing corn may be the last corn harvested.  Therefore, there is a high probability that my estimate will decline further.

The corn in general is 34% mature with the early planted corn 62% mature and the late planted corn mainly filling grain.  The corn in general is 75% rated poor to very poor with 90% of the crop rated short to very short on soil moisture. The later planted corn is doing worse than the early planted corn, which is the same case for soybeans.

Corn yields are also highly variable, with some areas reporting as much as 20% of the crop abandoned and other areas with very high corn yields.  One such lucky area is the municipality of Corral de Bustos in Cordoba where corn yields have been reported as high as 14,000 kg/ha or 215 bu/ac.

Brazil Soybeans - The weather last week in Brazil was once again on the wet side from about central Mato Grosso northward.  Southern Mato Grosso did not get much rain at all last week. They also had quite a bit of rain over the weekend in far southern Brazil which was good news for the later maturing soybeans in Rio Grande do Sul.  The forecast for this week looks like there will be more wet weather in north-central Brazil, but drying out somewhat in southern Brazil.

The 2017/18 Brazilian soybean harvest advanced 7% last week to 65% complete according to AgRural.  This compares to 68% harvested last year and 62% for the 5-year average. In Mato Grosso, the soybean harvest is 95% complete compared to 97% last year.  The slowest harvest pace in Mato Grosso is in the northeastern part of the state where the soybeans are 78% harvested.

One of the last areas to harvest soybeans in Brazil is the state of Rio Grande do Sul where the soybeans are currently 36% mature and 13% harvested.  In northern Rio Grande do Sul, the soybean yields are in the range of 3,200 to 3,600 kg/ha (46 to 52 bu/ac), which is better than initially expected. In some areas, the yields are more than 4,200 kg/ha or 61 bu/ac.  Much of the state received rain over the weekend, which should help the later maturing soybeans.

The other area of Brazil where the harvest is later is northeastern Brazil.  The weather in northeastern Brazil has been very favorable for the entire growing season and farmers are expecting their soybeans to set another record high yield.  The last remaining concern for farmers is if there will be too much rain during harvest.

Brazil Corn - Farmers in Brazil have harvested 43% of their full-season corn compared to 56% last year and 52% for the 5-year average.  The harvest pace is slower than last year due to farmers focusing more on harvesting their soybeans instead.

The planting of the safrinha corn crop in Brazil is essentially complete at 99%.  In Mato Grosso the safrinha corn planting is 100%. There is only a little safrinha corn left to plant in the states of Minas Gerais, Mato Grosso do Sul, and Goias.  

The safrinha corn is generally rated in good condition.  The most advanced safrinha corn is in Mato Grosso where the earliest planted corn will start to pollinate probably within a week.  The latest planted safrinha corn is in Parana and southern Mato Grosso do Sul. The late planted corn in these two states will pollinate about the middle of May.

The risk for the corn in central Brasil is the onset of dry weather before the crop is mature.  At the present time, the soil moisture is generally good across most of central Brazil with some declining soil moisture in eastern and southern Mato Grosso.  In Parana and southern Mato Grosso do Sul, the risk for the corn crop is the potential for frost by the end of May.

Some meteorologists in Brazil are forecasting that the summer rains will start to diminish during the first half of April, which would be about normal.  The final safrinha corn yield will likely be determined by when the summer rainy season ends.

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