December 19, 2011


Brazil's dry weather weakens soy, corn yields


Brazil's southernmost state's dry weather that will weaken soy yields from last year's record levels is hitting corn fields in the same areas even harder, crop specialists said.


So severe are the losses to some corn, that farmers in Rio Grande do Sul, Brazil's No. three soy state, are replanting fields of shrivelled corn stalks with soy as it at least has a chance of weathering drought, which is no stranger to the south.


"The corn areas hit by the drought could be replaced with soy with time to spare," said President of the Rio Grande do Sul Farm Federation (Farsul) Carlos Sperotto. "Soy can be planted until January 15."


About 10% of the 1.2 million hectares of corn has been damaged by the drought and could be replanted Sperotto said, adding some farms have already started resowing with soy. The area planted with soy could grow 4% from last year, up from 2.5% previously expected, he added. Even though the area for soy should expand, output in the state likely to fall to 10.4 million tonnes from the record output of 11.6 million last season, due to the dry weather in past weeks and near perfect rains last year.


Rio Grande do Sul accounts for about 15% of Brazil's soy output and 10% of its corn.


La Nina is prevalent again this season, which means Brazil's southern grain states and Argentina's are more likely to suffer from prolonged dry stretches. Last year, they didn't. "They are two sisters, the Las Ninas. The two don't necessarily behave the same. Last year, she was very good." Sperotto said. "This year, she's bad, at least at the start."


Chicago soy futures prices mustered support at about US$11 a bushel in the past week, as did corn futures at around US$5.75, roughly corresponding with the drier weather over South America's main grain exporters, Brazil and Argentina.


Brazil's grain belt started off the planting season with above normal rains in October but November fell short of average in nearly all the major producing states and December moisture has not made up for the deficit.


Most agronomists and meteorologists still say Brazil's soy crop is currently in good shape even in Rio Grande do Sul and some drier areas in southern Mato Grosso, the No. one soy producing state, and its neighbour Mato Grosso do Sul, the No. five soy state.


But the rest of December is not looking very moist, which means fields will start to get stressed if the light rains forecast for last this month don't materialize as expected.


The rest of Brazil's vast soy belt is not fairing so badly. The soy-rich enter-west has been getting enough rains to avert yield losses and some smaller but fast-growing north eastern soy areas such as Bahia just had some excellent rains that will help freshly-planted fields considerably.


For the next week, however, Rio Grande do Sul's soy areas are expected to remain dry with only some isolated afternoon showers, meteorologists Somar said in an extended forecast. Starting from December 24 a cold front is expected to bring a shade more than one inch (48 millimetres) of rain to the state's soy areas over a four-day period, Somar data showed.


But this will have to be followed up in early January with more substantial rains if the young soy crop in the south is to thrive and staunch the drop in yields. "There will be the chance for spotty showers this week in Rio Grande do Sul, but most of the rains will be coastal or off-shore," the Commodities Weather Group said in a bulletin.


"An event at the end of the 10-day period brings the chance for about one inch of rain to far southern Brazil, aiding topsoil moisture a bit but not easing moisture deficits in the southern corn/soy belt."

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