Brazil's Southern Soy Suffers, But Few Losses Yet

(DTN) Soybean crops look fairly healthy across western Parana but farmers warn that early-planted soybeans in this, one of Brazil's top soy regions, are suffering.

"We haven't had any rain since Dec. 9 and that is terrible news for a big part of the crop that is entering the pod-filling stage," said Sergio Dalla Costa, head agronomist at the Coopavel cooperative in western Parana.

"It's too early to talk about major losses, but we are worried as the forecasts don't show decent rain before January," he told DTN from the cooperative headquarters in southern Brazil.

Soybean markets have rallied in recent days on the possibility that dry weather could hurt soybeans in western Parana and elsewhere across the south, the region that produces about a third of Brazil's crop.

But analysts and experts are quick to reinforce Dalla Costa's point that losses are not yet a reality.

"The situation in western Parana is delicate and the forecast is worrying, but there is no disaster yet," said Danielle Siqueira, grains analyst at Brazilian crop consultancy AgRural.

A couple of factors have so far mitigated the effect of the dry spell, which has stretched to 30 days in some areas.

Firstly, the December dryness followed two months of above-average rainfall in Parana and Rio Grande do Sul. Secondly, the dry weather was accompanied by below-normal temperatures. As a result, residual soil moisture remains.

"The top soil is very dry but there are moisture reserves down below," points out Otmar Hubner, head agronomist at the Parana State Agricultural Secretariat.

Also, other regions don't plant as early as western Parana -- Rio Grande do Sul officially only finishes planting on Jan. 15 -- and, as a result, crops are mostly in the drought-resistant vegetative development phase.

Indeed, soybean-planted area in Rio Grande do Sul may grow 2.5 percentage points more than previously forecast because farmers are planting soybeans in drought-hit areas where corn has failed, said Carlos Sperotto, president of FARSUL, the Rio Grande do Sul Farm Federation.

"Most of the southern crop is resisting for now and can recover quickly if doused by heavy rains. That rainfall needs to arrive though," said AgRural's Siqueira.

Unfortunately, meteorologists predict no rain in the south before Friday as a dry air mass sits over the region. A cold front is expected to break the blockade over the weekend, but it will only bring light showers -- estimated at a half to three quarters of an inch -- to the southern grain belt.

"This will do little more than refresh the crops," admits Cesar Suares, a weatherman at the Sao Paulo-based Somar weather service.

Farmers will then have to wait another week for the arrival of a second cold front, due over New Year's weekend. However, charts indicate that this front will also be weak and is unlikely to provide the soaking that southern crops need.

"It's a very delicate situation," admits Suares.

Following the losses to the U.S. crop, all eyes are on South America to see if it can cover demand with the 2011-1 harvest. Brazil is expected to produce between 71.3 million and 75.3 million metric tons this season.

http://www.dtnprogressivefarmer.com

 

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