South American Update Archive

Logistics drive up costs for Brazilian producers

If you have read my previous article, when I wrote on Brazil’s corn production and the massive export record established this year, a question might have popped into your mind. How on earth is Brazil being able to export so much corn (and soybeans) if the country is well known for its terrible logistics? And, if you are really into the agricultural markets, memories of some famous photos of dozens of trucks waiting in line on some muddy road may have emerged.

Some Brazilian regions still have serious logistical problems, especially when compared to the United States. In 2018, the cost per metric ton to ship soybeans from Davenport, Iowa to Shanghai, China through the U.S. Gulf reached $88.80, according to USDA data. For Sorriso, Mato Grosso (Brazil’s top producer state), shipping soybeans to the same Chinese region, using the Brazilian port of Santos, cost $122.08 per metric ton.

That difference, of course, means that farmers who grow soybeans in Sorriso, located 1,190 miles from the port of Santos, in southeastern Brazil, received less for their production.Continue reading

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Understanding the Brazil corn crop

Even if the mere idea of visiting Brazil has never crossed your mind, you probably have listened to a song called “The Girl From Ipanema”, maybe in Frank Sinatra’s voice. And what does that song have to do with agricultural markets?

Nothing. But one of its composers, Brazilian Tom Jobim (who sings the song with Sinatra), once said that Brazil is not for beginners. That sentence became a famous and useful way to describe how difficult it is to understand Brazil’s peculiarities. And its corn market is one of them.

As you probably know, Brazil grows two corn crops a year. Well, since last October, it is officially three, but I will write about that third crop another time. For now, let’s stick to the two traditional crops. The first one is planted from September to December and competes for area with soybeans.

Considering that Brazil is now a soybean powerhouse, it is not a surprise that the first corn crop has lost millions of acres over the last two decades.Continue reading

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More regular rains take Brazil’s soybean planting to 58%

Brazilian farmers had planted 58 percent of their 2019/20 soybean area by Nov 7, according to a weekly survey conducted by AgRural. That represents a progress of 12 percentage points in one week and keeps the new crop planting pace slightly ahead of the five-year average. There is still a delay, however, in comparison to last year.

Favorable weather conditions seen last week took the area already planted to 94 percent in top-producer Mato Grosso, where the soybean crop develops well so far. The only issue, for now, is that the state will not have new soybeans entering the market as early as in the 2018/19 season, when some farmers were already harvesting in late December.

Mato Grosso grows about 65% of Brazil’s second corn crop, which will be planted right after the soybean harvest, in January and February 2020. That means that a good chunk of the Brazilian corn crop will not be behind schedule or have any significant problem caused by delays in the soybean planting.

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South American crop update

By Daniele Siqueira, AgRural

Another crop season is underway in Brazil and things have not started exactly well for soybeans. And a poor start to the soybean crop always fuels speculations about the second corn crop, which is planted in the beginning of the year, right after the soybean harvest, and accounts for about 70% of Brazil’s total corn production and almost the entire corn export program. That’s why many people are already asking about the second corn crop planting window. Is Brazil going to cut its corn acreage in 2020 due to the soybean delay?

By Oct 17, Brazilian farmers had planted 21% of their intended area, compared to 34% in the same period a year earlier and also 21% on the five-year average, according to consultancy AgRural.

In top producer Mato Grosso, the soybean planting caught up after a slow start in September, and about half of its area was already planted by Oct 17.… Continue reading

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Brazil watching U.S. crop

Since last November, I have had the opportunity to write a biweekly column about Brazilian corn and soybeans for Ohio’s Country Journal. Now, with the 2013-14 soybean crop already harvested and 70% sold down here, and with the second corn crop (the famous “safrinha”) finishing its pollinating stage, it’s time for me to say goodbye and focus on the new U.S. crop.

With a record 72.9 million acres planted with soybeans, Brazil started the season in October with high expectations. The goal of producing 90 million tons (3.307 billion bushels), however, was not achieved due to a hot and dry spell in early 2014, which damaged part of the crop in some regions.

In January and February, when everybody else (USDA, the Brazilian crop agency Conab and other private consulting firms) were still estimating a huge crop, AgRural, the company I work with, was already warning that yields would be lower than expected.… Continue reading

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Time to take a look at Brazilian corn production

With 85% of the Brazilian soybean area harvested by Apr 11, and with everybody expecting a production around 86 million tons (3.160 billion bushels), it’s time to take a look at the Brazilian corn production. The first crop, also known as “summer crop,” and planted from September to December, was damaged by the same heat wave that, earlier this year, resulted in a loss of 4 million tons (147 million bushels) of soybeans. The summer corn crop is estimated by AgRural to be 28.9 million tons (1.138 billion bushels), with a 10% annual decrease in acreage (due to the low prices seen in the second half of 2013) and a 7% drop in the average yield. On April 10, 56% of the area was harvested.

But the main corn crop in Brazil is not the summer crop anymore. The second crop, also known as “safrinha” (“little crop” in Portuguese), has gained more and more importance over the last few years.… Continue reading

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Is the grass a little greener in Argentina?

When I lived in Iowa in 2007 and 2008, working in AgRural’s small branch office in Des Moines, many Americans used to ask me about Argentina. They knew I was from Brazil but, even so, after talking a bit about how the crops were doing in my country, those guys always wanted to know about my South American neighbors. In general, I was not that well informed, especially because at that time I was more focused on U.S. agriculture. And, after all, Brazil and Argentina are very different countries, for better and for worse.

After coming back home, however, I started to pay much more attention to Argentina and its powerful agricultural sector. In 2011, I flew to the capital Buenos Aires for the first time, rented a car and, with the help of some good contacts, spent a few days driving around their main corn and soybean provinces — Buenos Aires, Santa Fe and Cordoba.… Continue reading

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Crop failure concerns growing in Brazil

It is mid-March and you, American farmer, are getting ready to start planting the 2014-15 crop. Here in Brazil, we are already concerned about the size of the soybean area that will be planted up there, since the U.S. is expected to boost the acreage to a historically high level this year. But our main concern, for now, is still our own crop failure — a crop failure that you, who take some time once every two weeks to read this column, have known about since mid-January, when a heat wave and very dry conditions were already damaging some of our fields.

Just very recently, however, the Brazilian crop agency Conab, the USDA and most of the private consulting firms admitted that our soybean crop is smaller than 90 million tons (3.307 billion bushels). On March 10, the USDA reduced its forecast from 90 million tons to 88.5 million (3.252 billion bushels) — still a very large crop.… Continue reading

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Lackluster Brazilian soybean harvest may fuel the bull

In my last couple of articles I warned that the Brazilian soybean crop would be lower than expected. In mid-January, during a severe heat wave, it was clear that many areas planted later were under significant weather stress, especially when rainfall became scarce, intensifying the effect of high temperatures on fields that were blooming or filling pods. At that time, the consulting firm I work with, AgRural, had already forecasted a production of 88.8 million tons (3.263 billion bushels), below the 90 million ton target (3.307 billion bushels).

In mid-February, we cut the forecast to 87 million tons (3.197 billion bushels), even with all the other consulting firms and even the USDA and the Brazilian crop agency Conab still estimating 90 million tons or more. How could we know that Brazil would have a crop failure (minor, but still a crop failure) before everybody? Satellites? Complex mathematical formulas? Luck? No. Just a close and honest relationship with experienced farmers all over the country, who help us see what is going on with their crop every year.… Continue reading

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Rain brings relief to soybean yield potential in Brazil

After a scary heat and drought spell in January and early February, it is raining again in Brazil and temperatures are much milder. This is good news for the soybean areas planted later, which were blooming or filling pods under very stressful conditions. On Feb. 14, the local consults for AgRural lowered again its production forecast, this time from 88.8 million to 87 million tons (3.197 billion bushels).

With favorable weather from now on, some areas might still recover part of their yield potential, which would result in a larger crop than estimated right now. However, despite the latest USDA supply and demand report, which raised the Brazilian crop forecast by 1 million tons, the dream of producing 90 million tons will not come true, as I wrote in my last articles. Last year, the country harvested 81.5 million tons.

By Feb 14, 21% of the Brazilian soybean area was harvested, compared to 16% a year ago.… Continue reading

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Brazil’s soybean crop coming down to the wire

Some American friends say they don’t like soccer — the Brazilian national passion — because it is a very slow and boring sport. In fact, a soccer match can be tied at 0-0 for its entire 90 minutes (45 minutes each half) and end tied, without scoring even a single point (called a “goal” by the way). My typical answer is that one of the biggest thrills of soccer is that everything can change in the very last minute. Even in a World Cup final. That’s why we have a popular expression here in Brazil for something that happens at the very end, coming out of the blue. We say “at the 45th minute of the second half.”

For the 2013-14 soybean crop, the 45th minute of the second half starts now, in February. A significant part of the crop is already dropping leaves or being harvested. The yields reported from the fields have been very good, except for a few areas in southern Mato Grosso do Sul and Goias where the crop was damaged by a spell of dry and hot weather in December.… Continue reading

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Big yield, or crop failure or both in Brazil

The soybean harvest is underway in Brazil and, with favorable weather conditions in most of the country since late December, it seems that the production has high chances of hitting a record high. The goal of 90 million tons (3,307 billion bushels) might not be reached, however, due to drought-related losses in some states, especially Mato Grosso do Sul and Goias, in central Brazil. In mid-January, AgRural, the local consultancy I work with, lowered its 2013-14 crop forecast from 89.5 to 88.8 million tons. Last year, Brazil produced 81.5 million tons.

So far, the largest losses are concentrated in southern Mato Grosso do Sul, the fifth soybean-growing state, where rains have been very irregular since the beginning of the planting season in October. Furthermore, the combination of lack of rain and high temperatures hit some areas in December. Even so, the crop conditions vary widely in that region, with losses between 20% and 30% in some areas and very high yields just a few miles away.… Continue reading

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The Brazil Report: Harvest has started

Although the usual planting dates vary widely in Brazil (some states start in September and others in November), January is a decisive month for a significant part of the soybean crop. In Mato Grosso and western Parana (the top two soy-growing states), the harvest has already started and the first yield reports are pretty decent.

Thanks to its particular weather conditions, Mato Grosso, located in central Brazil, has never had a crop failure caused by drought, and this year will not be different. Excessive rainfall in January and February, however, might hamper the harvest and help the Asian soybean rust fungus to spread out, affecting fields where the plants have not reached the dropping leaves stage yet. At this point, though, a crop failure in the state is very unlikely. The interesting thing this year is that some farmers plan on planting soybeans again after harvest, instead of planting corn as a second crop.… Continue reading

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Can corn exports continue to boom in Brazil?

In my last article, I wrote about the Brazilian corn exports. Due to the U.S. crop failure in 2012, Brazil became, for a brief moment, the world’s top corn exporter. But my question was: can Brazil be a real threat to the U.S. corn exports in a normal year? My answer was “yes” and “no.”

Yes because the South American country can grow two corn crops every year and still has much room to expand its acreage and improve its yields. Also, importers have finally found out that Brazil has corn to sell. So much so that Japan and South Korea, two of the most traditional importers of the U.S. corn, increased their imports from Brazil in 2012-2013 by more than 400% and 350%, respectively. And they are still buying of Brazilian corn, even with a huge U.S. crop entering the world market. Brazilian exports hit a fresh record high in October and kept a similar pace in November.… Continue reading

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