February 2, 2017

Farmers in Parana are Anxious to get Early Soy Harvest Underway

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Farmers in Brazil are anxious to start harvesting what is expected to be a record large soybean crop, but wet weather has frustrated their early harvest efforts, at least for the time being. Parana is the second leading soybean producing state in Brazil after Mato Grosso and according to the Department of Rural Economics (Deral), the early soybean harvest has started slower than expected.

Only a few percent of the state's soybeans have been harvested, but if the weather permits, the harvest should get underway throughout the state starting next week.

The weather this growing season has generally been good throughout most of the state with the exception of the far western municipalities where dry weather during the month of January may trim the soybean yields.

As a result, Deral is expecting the 2016/17 soybean crop in Parana to produce 18.3 million tons. If achieved, it would set a new record and be 11% more than the 16.5 million tons harvested in 2016. Deral is estimating the statewide soybean yield at 3,497 kg/ha (50.7 bu/ac) or 12% more than last year. Analysts at Deral have speculated that the statewide soybean yield might even be higher than they are currently anticipating.

While the yields are expected to be very good in Parana, the farmers in the state have been relatively slow sellers of the 2016/17 soybean crop. Deral estimates that farmers in the state have sold 14% of their anticipated 2016/17 soybean production compared to 34% sold last year at this time. The average price for soybeans in the state is currently R$ 67.00 per sack (approximately $ 9.80 per bushel) which is 5.6% less than last year when soybeans were selling for R$ 71.00 per sack (approximately $ 10.40 per bushel).

The harvest of the full-season corn crop in the state is just getting underway as well with 1% of the corn harvested. Farmers in the state planted 500,000 hectares of full-season corn which was an increase of 21% compared to last year. The full-season corn crop is expected to produce 4.4 million tons or 33% more than last year. The planting of the full-season corn was delayed last September and October due to cold spring weather.

Farmers in the state have already planted 4% of the anticipated 2,300,000 hectares of safrinha corn. The safrinha corn crop in the state is expected to produce 13.5 million tons.

Corn prices in Parana are below what farmers had expected. The current price of corn is R$ 26.00 per sack (approximately $ 3.80 per bushel) or 13% lower than last year's price of R$ 30.00 per sack (approximately 4.40 per bushel).

Farmers in the state have been slow to forward contract their safrinha corn in anticipation of better prices going forward, but unfortunately, most analysts expect corn prices to decline even further with the advance of the harvest. Corn prices in Parana are expected to decline to the minimum price guaranteed by the government, which is R$ 19.21 per sack (approximately $ 2.80 per bushel).