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Update: Brazil's Soybean Planting Progresses

Porto Alegre consultancy Safras & Mercado announced on Monday that the weather has improved in the Center-West of Brazil last week. The rains allowed an advance of the soybean planting to 46% of the projected surface in Brazil. On October 31, the crop progress was at 22%. By the same period of 2013, planting had reached 59% in the area.

In central parts of the country, in states like Minas Gerais, Goiás, and São Paulo, geographically the Southeast and Center-West in the Brazilian Census, scarcities of water have forced local government to give big incentives for savings of the resource. "These states roughly had started the works, but rains recently allowed the advance of works," analyst Luiz Fernando Gutierrez Roque said in a press release.

While the issue is drought for some regions, in others it is the excess of rains. In Rio Grande do Sul, the southernmost state of Brazil, soybean planting is just at 14% of the area. The average for the month is 27%. The wheat harvest is delayed because of floods and, consequently, planting of the oilseed as well.

 

Early appearances of the caterpillar Helicoverpa armigera (known as the earworm in North America) were reported in Rio Grande do Sul and Goiás. In previous seasons, the caterpillar generated billions of dollars in losses.

Yet, the latest USDA report data still puts the Brazilian production at a record of 94 million tons.

Argentina

In neighboring Argentina, planting of the oilseed did not start yet. The Rosario Board of Trade forecasts that the soybean surface in the country would range from 50.9 million acres to 51.6 million acres. That is slightly more area than what was planted in 2013/2014. However, some are disagreeing with these early estimates.

Last month, Gustavo Grobocopatel, the executive of Argentina’s leading soybean group Los Grobo, raised the possibility that at least 2.4 million acres would not be planted in the country because of a lack of access to bank financing.

 

This week, a report from Buenos Aires newspaper La Nación revealed that several farmers in the major producing regions of Argentina are having no access to money at all. Loans have not being released in the last 15 days. The measure, according to the paper, was taken by the government to force producers to sell soybeans. Last December, state-run bank Banco Nación reduced the loans to farmers by 20%. Now again, the bank has announced a new measure to cut 20% more on new contracts.

A study from the Confederation of Rural Associations of Buenos Aires and La Pampa says that the limitations have resulted in a 50% fall of the rural producers purchasing power.

Argentina's exports of grains generated US$ 611 million by October 31. There is an estimated stock of 18.9 million tons of soybeans yet to sell in the country. 

"I don't think there will be a quick sale of these stocks of soybeans. There is a compromise of exporters with the government to sell nearly US$ 5.8 billion by December. The problem is that exporters need to buy from farmers who want to hold it for a while more," explained Pablo Fraga, a market analyst at BLD, a brokerage from Rosario, the top grain port in Argentina.

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