Report Highlights: 

The 2014/15 soybean production forecast is maintained at 94 million metric tons (MT) despite slow pace of plantings in Mato Grosso. The soybean exports forecast for the 2014/15 marketing year is lowered at 47 million MT due to late plantings and slow pace of commercialization.

2014/15 Soybean Production Forecast Maintained Despite Slowest Planting Start in Five Years 

Post maintains its production forecast at a record of 94 million metric tons (MT) despite the slowest planting start in five years. It is estimated that just over 10 percent of the crop has been planted nationwide as a result of dry weather. In Mato Grosso, the most important soybean producer state, only 9 percent was planted as of October 16, compared to 27.4 percent during the same time last year. After October 16, many areas of Mato Grosso had to suspend planting due to the lack of rains. Some producers are worry about the possibility of replanting because of the lack of soil moisture. 

Despite early rains at the end of September, many farmers have waited for additional rains to ensure adequate soil moisture. However, the first two weeks of October were dry in many areas of the country. According to various reports, the central and southern areas of Mato Grosso received between 0 to 0.2 inches in the first two weeks of October. The average precipitation for the whole month of October is 5.3 inches. 

At this point, the late plantings should not have a major impact on the crop size as long as the weather improves. To that end, rains are forecast for the last week of October. The window of opportunity to plant soybeans is still good, but the situation can impact those farmers planning to plant a second crop (“safrinha”) with corn. The corn area for the “safrinha” could be lowered since the late soybean plantings would result in a shorter growing season for corn. 

The Sharp Drop in Soybean Prices Concerns Farmers 

Lower soybean prices continue to be a concern for Brazilian farmers. Since March 2014, prices have continuously dropped due to expectations of record crops in the United States and South America. The lower prices are also affecting commercialization of the 2014/15 crop, as farmers are holding their sales in hope of higher prices later in the year and expectations of a weaker Brazilian currency, which would help exports. The weaker Brazilian currency is expected as a result of slow forecast economic growth forecast for Brazil in 2015. 

The average monthly soybean price in the state of Paraná in September was R$58.94 per 60 kilos (US$24.55), a 17 percent drop compared to the same month in 2013. However, farmers in Paraná, the second biggest producing state in the country, benefit from their proximity to ports. In Mato Grosso, the situation is more unfavorable. Prices in October have averaged R$55.00 per 60 kilos (US$22.91), but transportation costs to the ports offset the lower costs of production that farmers enjoy in this part of Brazil. 

2014/15 Soybean Exports Lowered to 47 million MT 

Post has lowered by 1 million MT its export forecast to 47 million MT for 2014/15 marketing year (MY). The forecast has been lowered due to the delays in planting and the slow pace of commercialization. In Mato Grosso, commercialization of the new crop is only at 16 percent, compared to 41 percent in the same month last year. Despite the slow commercialization and the lower growth rate expected in China, import demand is still expected to be substantial. As a result, sales of the new crop are expected to pick up the pace later this year. 

Even though post forecasts record soybean exports for the 2014/15 MY, the relatively low soybean prices will impact the total value of Brazil’s soybean and soybean derivate exports. The Brazilian Vegetable Oil Association (ABIOVE) released its forecast for 2014/15 MY and noted that soybean and soybean derivatives export values will drop for the second year in a row. Exports of soybeans, soybean meal, and soybean oil are expected to drop by 20 percent in 2014/15 MY compared to the previous MY