All eyes are on the rainfall maps in Brazil, looking for any indication that the rainy season is coming back to life.

September rainfall averages are usually less than 2 inches, but they do allow the farmer to begin the process of restoring moisture in their soil bank. Most farmers will look for at least 3 inches before they feel comfortable shifting to high gear on planting speed.

We have heard some reports of late September rains, but we cannot confirm anything substantial. Ten-day weather anomalies continue to show below average rainfall.

While the longer-term forecasts are rarely as accurate, the European 30-day weather anomaly does show moisture building into mid-October. It is too soon to confirm anything, but if that forecast is accurate, soybean seeding could still begin on time in the Center West region. The GFS model, however, is much less generous with rainfall.

If we believe the European model, the closer we get to Oct. 1, the more precipitation in the ECMFW comes drifting into Mato Grosso.

This may be enough for larger operations short on planting capacity to want to begin. The bulk of producers may still wait for conclusive evidence. Some are traumatized from last year when the rainy season did a head fake, with the weather turning dry in late October/early November. The point is that while some precipitation may be headed that way, neither model shows general soaking rains by Oct. 1. Nevertheless, we are aware that some producers are starting to plant.

The rain falls mainly in Southern Brazil

Southern Brazil is a different story.  Pockets of Southern Brazil continue to see too much rain, especially in RGDS. The western part of the state of Parana is free to begin planting and should see on-time planting progress. The other side of the state is not yet allowed to begin planting soybeans until Sept. 20.

As the forecast in Parana looks more favorable, soybean planting should move forward in that state as well.  Parana is the second largest soybean producing state, with its planting schedule lining up more or less in parallel with Mato Grosso. 

CONAB/USDA production estimates

Not surprisingly, CONAB left their September 2023-24 soybean production estimates unchanged. Their corn estimates also are virtually unchanged, allowing for but a modest 74,000 MT increase, pegging corn production at 115.7 MMT. They reduced yield by 0.3 bpa but offset that with an additional 230,000 acres, placing total corn acres at 52 million acres.

It does not appear that the production estimate gap between that of CONAB and the USDA will come together. This is not the first time this has happened. But, historically, it is not common.

Figure 1: Total Precipitation Through October 1st

Figure 2: October Weather Anomaly Shows Partially Improved October Precipitation

Matthew Kruse is President of Commstock Investments.  Subscribe to their report at www.commstock.com.

Futures trading involves risk. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that CommStock Investments believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.