Much has happened since Sept 1.
Back in Sept, I too was a proponent of 135 mmt of soybeans
and 110 mmt+ of corn. Today, I am not.
I read weather reports saying that this is worst drought in 40 years.
I might remind readers that 2015/2016 drought was quite severe.
I must try and rationalize this. Forty years ago there were no soybeans
in Mato Grosso. There were only cows, gold speculators and T-rex's
roaming the great Cerrado or transitional Amazon rain forest.
Back in August and September, when the Pantanal was on fire and
making global media attention, I read that this is the worst Pantanal fire
since 1950 or some such date 60 or 70 years ago.
"Correio Braziliense writer Simone Kafruni noted that, “while the eyes of the world are focused on deforestation in the Amazon, the fires do not stop burning the Brazilian Pantanal.” According to the article, the lack of rain in the biome for the period is one of the worst in that region in the last 47 years:"
The point being is that this has happened before- before the modern soybean era.
So, in my mind, we cannot blame this on soybean farmers and deforestation.
We maybe can make a case for an acceleration of a natural process, but we cannot
blame 100% of this on agriculture.
As of today, Nov 25th, 2020, we are experiencing below normal rainfall in several
Brazil states and into Argentina. Many call it La Nina. However, in the Pacific Ocean,
we do not have La Nina type conditions. So, for the sake of argument, let us say we are
experiencing a weather anomaly that has La Nina type conditions.
This has caused the replanting of soybeans. It has caused a few producers, who grow cotton as a 2nd crop, to hold back some intended area of 1st crop soybeans so they can plant their cotton in a timely manner in December.
We are hearing about major losses in 1st crop corn in RGDS.
We have some soybean fields that look fantastic and others that are flowering and setting
pods and are only 10 inches high.
Generally speaking, if we draw a line EAST/WEST from Cuiaba, MT across the country,
to the north of this line the crops are fine and to the south of this line we have crops that range from
terrible condition to those running on luck because they have caught a few random showers.
Cuiaba to Goiania is 16 deg S latitude.
I would say those crops north of 15 Deg S latitude are in good shape or at least
have some cushion to handle a hot dry week such as what we are experiencing.
So the question is: How much soy is growing north of 15 Deg S latitude and how
much is under stress to the south of this line?
Mato Grosso 37 mmt potential with 7 mmt in SE MT under stress
Goias 13 mmt potential with 50% under stress
MaPiToBa potential is 15.7 mmt and all is in good condition
Minas Gerias 6 mmt with 50% under stress
Sao Paulo 4 mmt with 50% under stress
Parana 20 mmt with 50% under stress
RGDS 20 mmt with 50% or more under stress, but later planting
Santa Cat 2.5 mmt and under stress
MGDS 12 mmt with 50% under stress
Para and Rondonia 3 mmt and in good shape
So if we split out the production north and south of 15 deg S latitude, we get
something like this:
Good soybeans = 30+ 6.5+15.7+ 3 = 55 mmt of potential in good shape(bumper crop)
Soybeans under stress either yellow or orange alert = 78 mmt
Of the 78 mmt there are perfect fields growing, there are fields with yellow
alert drought stress and some orange spots where soybeans are complete crap.
Maybe 20% of the areas are in dire need of water yesterday or are already
podding and the potential is fixed.
So, Yes December is critical for maintaining yields.
This week is dry.
There is rain in the forecast for next week.
If these rains hit the areas in need, that can help stabilize the 78 mmt
If these rains miss, we need to start talking about 10% and 20% production
hits to those areas south of 15 deg S latitude or the 78 mmt potential at the
beginning of the season.
Place your bets
For more info:
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