MARKET ANALYSIS

STORMS DAMAGE BRAZILIAN SOYBEANS AND SOME ACRES WILL GO UNHARVESTED

The central parts of Mato Grosso and Tocantins have been experiencing record rainfalls with some farms receiving 10 inches within a couple of days. To be clear, large swamping rains are a regular occurrence in Brazil; however, even this is getting out of control. The hardest hit region was the county of Sorriso, the largest producing county in the state. There is still a reported 25% of soybeans that were unharvested. Part of this is because the stalks have collapsed but even worse, the beans have all begun rotting or germinating in their pods.

So even if they were able to run machines through the field, quality levels are so poor that the elevators may not accept them. Not to mention drying costs would be very expensive even if they were accepted.  IMEA, the Mato Grosso Institute of Agricultural Economics, still increased Mato Grosso’s soybean production to 35.7 MMT but that was just before some of these latest rains. With all the heavy rainfall, it not only slows up the soybean harvest but delays the corn planting. Farmers sold ahead the majority of their crop and so feel compelled to plant despite the fact that the ideal planting window has now passed. Some of what has been planted has water damage while long term forecast is showing dry weather.  There could easily be a drop in 10 MMT if the dry weather materializes. That is nearly 400 million bushels that they can’t afford to lose.

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