South America Begins Soybean Harvest

Early indications show healthy yields

Mato Grosso started harvest of its early-planted short-cycle beans, with about four percent of Brazil's largest soybean-producing state harvested (though that number will bump up on Sunday or Monday, when a new report comes out.)

Western Mato Grosso producer Ademir Rostirolla said his neighbors are getting around 44½ bushels per acre, and are following the combines with planters—though those planters will carry less corn this season, and more cotton, popcorn and field beans.

Meanwhile, at least one producer further south in Paraná, Brazil's second-largest bean producer, said his earliest fields are producing 52 and 57 bushels per acre. So it looks like some of those forecasts for a truly enormous 2013-14 Brazilian soybean crop hold promise to become true.

Meanwhile, one major consultancy has slightly lowered its forecast of total Brazilian 2013-14 soybean production, to 88.78 million tonnes, from last month's estimate of 89.4 million tonnes. The consultancy, AgRural, had estimated the crop at 89.4 million tonnes last month, but incessant rains in parts of Goiás state cooled things down a bit.

In Argentina the Buenos Aires Grains Exchange announced this week that farmers there are now 98.4 percent done planting their projected 50.26 million acres of 2013-14 soybeans.

Brazil importing ethanol

Meanwhile up in Brazil's Northeast—the big eastward-pushing hump of the country that stretches toward Africa—sugarcane producers are in the final stretch of harvest right now, too. While farmers there only produce about ten percent of Brazil's ethanol fuel, the commodity is important to them economically.

But one company in the region—which is not just close to Africa, but also a rather short trip to Florida and New Orleans—has peeved those producers by arranging to import cheaper U.S. corn ethanol.

As the head of one local sugarcane trade association told a reporter, "None of our members agrees with the importation of ethanol during the harvest, as it hurts all of us. This concerns us because we've had two short crops, and ethanol from the U.S. comes laden with subsidies provided by the government there."

A recent calculation put the pump price in Brazil's Northeast for locally-produced ethanol at $2.83 per gallon. The U.S. product will arrive at $2.34 per gallon.

Maybe corn ethanol is the real "sweeter alternative."

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