With the exception of a couple of dry areas in southern Mato Grosso do Sul and Sao Paulo states, Brazil's 2013-14 soybean crop is in excellent condition going into harvest season, Agroconsult, a leading local farm consultancy, said Tuesday.
As a result, it raised its crop forecast to a record 91.6 million metric tons (mmt), 11% higher than last year and above the market consensus that sits at around 89 mmt to 91 mmt.
Crops in Mato Grosso, the No. 1 soy state, and most of Parana, the No. 2 state, are in better conditions than last year, as were those in northern parts of Mato Grosso do Sul and Goias states.
Meanwhile, crops in Rio Grande do Sul, the No. 3 state, and southeastern Goias are in about the same condition as 2012-13.
"The crop looks fantastic in most of Brazil," Andre Pessoa, director of Agroconsult, told a press conference in Sao Paulo Tuesday.
This year's crop is very advanced compared with recent years, said Pessoa.
At the end of December, some 58% of Brazil's crop was in the flowering or pod-filling stage compared with 43% last year and 30% the year before.
That means some 42% of the crop will be ready to harvest by the end February, which is remarkable when you consider that only 10 years ago the peak of the harvest was late March.
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The reasons for the bringing forward of the harvest are various, said Pessoa.
Firstly, everybody wants to harvest quickly to leave time for a second crop, which is normally corn.
Advances in technology have allowed many farmers to make this desire a reality. Different to a few years ago, high-yielding short-cycle and super-short-cycle varieties now available for all producing regions
Secondly, heavy investment in planters and combine harvesters has given farmers the capacity to concentrate planting.
Finally, rains arrived early in most producing regions this year, allowing farmers to bring the soybean season forward.
"We have a new reality where peak harvest now takes place between Feb. 15 and Mar. 15," said Pessoa.
But the concentration of field work in February will accentuate Brazil's logistics problems.
Last year, chaos descended on Brazilian ports as logistics failed to cope with the volume of soybeans and corn to be exported. In March last year, ships waited up to 70 days to load soybeans at Paranagua port, and the cost of freight from Sorriso, Mato Grosso to Paranagua doubled to R$320 per metric ton (nearly $4 per bushel).
There is a theory that the situation won't be as bad this year because soybean exports won't have to compete for space at port with second-crop corn in February. There also have been some port improvements.
But the fact is that Brazil will have an extra 9 mmt of soybeans to deal with in 2014, which will all arrive on the market in February and early March.
Storage capacity has not grown significantly in the interior over the last 12 months and so a lot of that soy will be sent to port.
"A logistics situation as bad or worse than last year is quite possible, especially since farmers have sold a smaller proportion of the crop ahead of harvest in 2013-14" said Pessoa.
One of the most commented-on subjects this season is the possibility that Brazilian farmers will plant a second crop of soybeans because corn prices are so bad.
Pessoa said that he did not believe the farmers will take the sanitary risk that planting a second crop represents, and actual planting will end up not much larger than the 370,000 acres planted last year.
Alastair Stewart can be reached at firstname.lastname@example.org
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