Brazilian soybean harvest off to a slow start

The harvest of the 2017/2018 season was 0,8% completed at the end of January. The 5-year average is 1,2% (on the same date). Last year, 2,2% of the soy had already been collected at this time. There are significant differences per province. For example, Mato Grosso, the largest soy state in the country, currently has 2,8% of the harvest. Last year it was 7,5% and the 5-year average for this area is 3,9%.

Good crops
In addition to the rainy weather, the long sowing season is also the result of a harvest delay; sowing started 14 days later. For the time being, crops are in good shape in the Midwest and the Paraná region, writes marketing agency AgRural.

weather risk
There are 2 scenarios possible. Crops in the Midwest are most at risk of quality losses from prolonged rainfall. If a lot of water falls in 1 month, the harvest will be seriously affected. This fear is certainly well-founded among arable farmers. Various weather services predict continued changeable weather for the Brazilian Midwest. 

There is a drought in the southern arable regions, especially in the state of Rio Grande do Sul. The crops have been adversely affected by a lack of moisture during the growing season. However, rain is forecast for the coming days, which could improve yield expectations.

Positive mood
For the time being, Brazilian arable farmers remain positive about the upcoming harvest. The crops are all in good condition on average. Only the price is feared. It is already under pressure; a lot of soy has already been sold in advance. The wet weather is also a concern, as long as the combines are not ready.

In Chicago, the soy contract is under pressure, just like that of wheat. The price of soy lost $5 per ton during week 8. The Chicago Board of Trade (CBoT) is more favorable to the corn contract. It was the only commodity to post a profit in the past week. Over 5 trading days, $1,09 per tonne was added. This means that the month-end closing has the highest price level in January. This also applies to soy and wheat.

(Text continues below chart)The quotation of soy had to suffer a sharp decline on the CBoT in week 5.

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Corn takes profit
Strong exports from the United States (US) are partly responsible for the price increases. The USDA announced on Friday, February 2, that an export order for 365.000 tons of grain corn had been secured (copper Egypt). Analysts expect that corn exports may exceed the expectations of the Ministry of Agriculture.

The weather conditions in South America and the state of the winter wheat acreage in the US are also being closely monitored. They offer opportunities for the corn market.