Brasilia-based farm group Aprosoja says those subsidies might be costing Brazilian farmers $1 billion a year in lost business, according to Endrigo Dalcin, president of the association’s local branch in Mato Grosso, the nation’s top soy-growing state (all figures US$).

“Data is being analyzed to see if it is viable for us to question this American protectionism,” Dalcin said. Aprosoja has hired lawyers from Chicago-based law firm Sidley Austin LLC in Geneva, where the WTO is based, he added.

A spokesman at Brazil’s foreign ministry confirmed the farmers had made the request but warned the proposal needed review by several ministries and that the government would take at least a month to make a decision.

If opened, a WTO dispute could strain relations between the Western Hemisphere’s two largest countries after they grew closer last year.

Relations hit a low point in 2013 when Brazilian President Dilma Rousseff canceled a U.S. visit over an National Security Agency eavesdropping incident. But she traveled to Washington last June, and the two agricultural superpowers reached a deal for Brazil to export fresh beef to the U.S.

Soy farmers are following Brazilian cotton producers, who won $300 million in compensation from the U.S. in 2014 to settle a decade-old trade dispute over subsidies.

Brazil will probably overtake the U.S. as the world’s top soybean producer in coming years as it increases planting of the crop each season. It is already the world’s top exporter.

Brazilian officials told Reuters in April that the South American country had been gathering evidence that U.S. subsidies were pushing down already low prices for soy and corn .

A weakening currency against the dollar has since made Brazilian soybeans more competitive for export.

This season, Brazil is expected to harvest a record 100 million tonnes of soybeans, compared with 108.3 million tonnes from the U.S., according to the U.S. Department of Agriculture.

The soy harvest has gotten off to a late start in Mato Grosso. Only 0.3 per cent of the state’s soy acreage has been harvested, compared with 1.9 per cent a year earlier, after dry weather earlier in the season, farm institute IMEA said Friday.

— Caroline Stauffer is a Reuters correspondent based in Sao Paulo.

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The TCU is probing loans used to purchase U.S.-companies Swift and Co, for about US$225 million in 2007, followed by Smithfield Beef Group in 2008 and a controlling stake in Pilgrim’s Pride in 2009, according to a preliminary report seen by Reuters Thursday.

“I understand that the three capital contribution transactions include privileged treatment granted to the company JBS,” according to the report, signed by TCU minister Augusto Sherman Cavalcanti.

The originally family-run butcher has grown into a global giant that this year acquired Cargill’s U.S. pork assets and Moy Park, the British unit of rival Marfrig.

The TCU report said that expansion largely stemmed from 10.6 billion reais (C$3.7 billion) in loans from BNDES between 2005 and 2014, an amount the TCU said it was not able to trace to transactions carried out by JBS in that period.

JBS, whose Canadian holdings include major Alberta beef processor Lakeside Packers, said in a statement all of its transactions with BNDES were transparent and are available for review on its website and Brazil’s securities regulator.

A BNDES spokeswoman said the bank was waiting for more information as the TCU report was not final. BNDES loans to the meat sector over the past decade had generated some five billion reais in returns, she said.

The TCU investigation comes days after federal judge Sergio Moro instructed police to collect documents from BNDES headquarters related to loans the bank made to a sugar mill controlled by rancher Jose Carlos Bumlai.

Bumlai, a confidant of former President Luíz Inácio Lula da Silva, was arrested Tuesday for his role as an alleged intermediary in a series of unpaid loans that benefited business associates.

The report said the TCU questioned BNDES’ approval of a loan for the debt-laden Swift in just 22 days, calling it a “complex” and “high-risk” operation. The approval of “an even more complex” purchase of Smithfield Beef, the cattle division of Smithfield Foods, took just 15 days, the report said.

Loans to JBS resulted in steep losses to BNDES and the public treasury, according to the TCU.

— Caroline Stauffer is a Reuters reporter in Sao Paulo.

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A year earlier at this time 29 per cent of the previous crop was planted, while last week planting was 20 per cent complete, AgRural said.

Later planting will not necessarily limit output – last year’s crop was a record – but it could leave less time for farmers to plant a second annual crop of corn or cotton.

Top soy growing state Mato Grosso is most behind schedule because of lack of rain. Planting was 36 per cent complete, up from 20 per cent last week and behind the 66 per cent five-year average, AgRural said.

Rains were scarce until Oct. 20 in Mato Grosso, slowing planting that officially started on September 15. The Reuters weather dashboard shows that rains will pick up now through mid November, however, which should favour planting.

Reporting for Reuters by Caroline Stauffer.

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Inmet meteorologist Fabricio Daniel dos Santos Silva said six consecutive quarters of warming sea surface temperatures in the Pacific Ocean “indicate an El Nino event of weak intensity, tending to pass into a moderate stage by the end of the year.”

El Nino can lead to scorching weather across Asia and east Africa, but heavy rains and floods in parts of South America. It caused food prices to surge in 2009.

In Brazil, a country the size of the continental U.S. and a top global supplier of sugar, coffee, beef and soybeans, the impact of El Nino’s return will likely be varied.

Dos Santos said in an email late on Monday that El Nino characteristics were already affecting Brazil’s semi-arid northeast, where a severe drought began in late 2014 in one of the country’s poorest regions and is already considered high intensity.

He said the centre-west, home to the top soybean producing state of Mato Grosso, will likely see above-average rains by the end of the year, a forecast farmers who will plant their 2015-16 soybean crops in September are celebrating.

“We usually benefit from more regular rainfall,” Ricardo Tomczyk, president of Mato Grosso state’s soy farmer association, Aprosoja, said of the El Nino forecasts.

In the south, where the No. 2 and No. 3 soy-growing states Parana and Rio Grande do Sul are located, El Nino could also bring above-average rain, especially from May until July, dos Santos said.

He said the effects of El Nino in the southeast cane- and coffee-growing regions would likely be warmer temperatures and not necessarily more rainfall. That is good news for arabica coffee in Sao Paulo and Minas Gerais, where rains during the May-August harvest have caused damage.

Silas Brasileiro, president of the National Coffee Council, said Parana, which produces two per cent of Brazil’s annual output, was most at risk of seeing coffee cherries damaged during harvest if El Nino intensifies.

The U.S. Climate Prediction Center forecast on May 14 the chance of El Nino conditions developing during the Northern Hemisphere summer at 90 per cent, up from 70 per cent in its April forecast.

— Caroline Stauffer is a Reuters correspondent based in Sao Paulo, Brazil.

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Authorities have agreed to restrict truck access to some terminals at the port at least through Wednesday while flames are extinguished.

Brazil, the world’s No. 2 soybean producer, is finishing harvesting a record crop and Santos is responsible for moving one third of the country’s exports of the commodity.

Trucks heading to the port through the city of Santos on the Anchieta Highway were prevented from entering at midnight on Monday. Trucks could still proceed to Guaruja, a city on the opposite side of the ship channel.

“(Grain) stocks at the port are no longer supporting shipments on the (Santos) margin,” Daniel Amaral, economist at Brazilian vegetable oil association Abiove, told Reuters. Abiove represents the country’s largest soy traders.

Authorities plan to keep the entrance closed to most trucks until Friday, although they are revising that decision every 12 hours.

Amaral said Abiove members are concerned they will have to pay fines for delayed shipments. If trucks are restricted until Friday, shipments would only return to normal on Sunday, he said.

Port authority planning director Luis Montenegro said that though there will be some impact on grains exports, ships will only be delayed by a day or two, which he said is a period often covered by delivery contracts.

Some 45 per cent of the grain shipments to the restricted area usually come by truck, while 55 per cent arrive by train, he said.

By Tuesday morning two of six fuel tanks at the storage facility were on fire, the facility’s operator, Ultracargo, a unit of Brazilian chemical and fuel-distribution company Grupo Ultra, said in a statement.

Six tanks with a combined capacity of 34,000 cubic metres (214,000 barrels) of ethanol and gasoline were damaged after the fire first broke out on Thursday, Ultracargo said.

Shipping agents Williams reported that the state-run oil company Petrobras has informed companies that its supply barges are now authorized by the Harbor Master to resume bunker fuel deliveries, which are due to restart overnight.

The harbour master had banned ships from restocking bunker-fuel supplies after the fire broke out last week.

The Santos side of the port is also home to sugar terminals operated by Copersucar and Cosan SA’s Rumo Logistica. Officials at both companies said sugar was still arriving at the terminals by train, minimizing the impact on exports.

— Reporting for Reuters by Gustavo Bonato and Caroline Stauffer; additional reporting for Reuters by Jeb Blount and Priscila Jordao.

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There were seven protests over rising freight costs affecting federal highways, down from 18 on Monday and well below peaks of more than 100 a week ago, police said. May soybean future prices fell 0.76 per cent as a result.

By mid-afternoon 500 trucks had arrive at Brazil’s No. 2 soy exporting port of Paranagua where recent roadblocks depleted soy stocks. That was enough to guarantee exports at least through Thursday rather than Wednesday, a spokesman said.

In addition to leaving supermarkets with empty shelves and slowing soybean harvesting, the strike has cost Brazil’s poultry and pork industries about C$300 million, industry association ABPA said. Some slaughter plants remained closed due to roadblocks, it added.

Access to the country’s main poultry exporting port of Itajai in Santa Catarina state has also been blocked since Friday, according to Fabio Rosa, a manager at a private warehouse near the port.

Warehouses such as his are full, holding some 300 refrigerated containers, he said.

“We’ve never had this many containers. The big companies, JBS, BRF are all waiting to access the port and load ships,” Rosa said.

JBS SA said on Monday it had obtained a court order to have police escort its trucks past protests, but Rosa said that wasn’t helping trucks access the port.

In the state of Rio Grande do Sul, where protests have turned violent, police arrested 20 people on Monday and two protests remained on Tuesday, police said.

Seventy per cent of operations at the Rio Grande port were affected by the strike, a spokesman said. The port will finish an analysis of grains stocks by Thursday and is not at risk of running out before then, he added.

The BR-163 highway, a key soybean corridor in Mato Grosso, was completely clear for the first time since protests ignited on Feb. 17, highway operator Rota do Oeste said on Tuesday.

Truckers in the centre-west grain state said they had opened roads temporarily as protests focus on the nation’s capital amid talks with the government.

“It’s a truce due to the meeting this Tuesday in Brasilia,” said Mato Grosso trucker Junior Boscoli on the phone from the capital, where drivers around the country are gathering.

— Reporting for Reuters by Caroline Stauffer and Gustavo Bonato; additional reporting by Marcelo Teixeira.

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By mid-afternoon there were 23 road blockages in three southern states, down from 99 points nationwide a week ago, the federal highway police said.

Access to the country’s main poultry exporting port of Itajai in Santa Catarina has been blocked since Friday, affecting meat packers BRF SA and JBS SA, a port spokesman said.

A BRF spokeswoman said the company had reopened all the plants it had to close as a result of the strike and animal feed was being transported to farms.

The country’s No. 3 soy exporting port of Rio Grande, in Brazil’s southernmost state of Rio Grande do Sul, said 70 per cent of its operations were affected.

The nearly two-week-old movement has slowed grain deliveries, delayed soybean harvesting due to lack of diesel fuel and forced meat-processing plants to close.

Government trade data on Monday showed monthly pork exports were the lowest in nine years in February at 22,000 tonnes. Brazil exported just 869,000 tonnes of soybeans last month, 69 per cent less than in February 2014, the data showed.

A spokesman at the Port of Paranagua, the country’s second-largest soybean export point, said its stocks were running low and could run out by Tuesday or Wednesday if more trucks did not arrive.

Even so, March soybeans on the Chicago Board of Trade fell 1.84 per cent and traders said their concerns over the strike had eased.

A spokesman for Rota do Oeste, which operates the BR-163 highway in top soy-growing state Mato Grosso, said there were three protests on the route. The federal highway police did not include any roadblocks in Mato Grosso in its latest report.

The federal government said President Dilma Rousseff would sign into law on Monday a new truckers’ bill to lower toll costs, waive fines for overweight trucks charged in the last two years and build more rest points on federal highways.

Though he said the law would do little to address protesters’ main concern over high diesel costs, Diumar Bueno, the president of the National Confederation of Autonomous Transporters, told members to stop the protests.

“They can’t afford to remain on strike anymore, they need to work,” Bueno said, urging protesters not to heed a call by some truckers to travel to Brasilia to protest.

— Reporting for Reuters by Caroline Stauffer and Marcelo Teixeira; additional reporting by Gustavo Bonato.

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The landmark deal, already finalized by a firm that declined to be identified, highlights an increasingly complex relationship between global grain merchants and biotech firms.

Other bigger merchants, such as ADM and Bunge, will finalize agreements soon, the sources said, resolving a months-long dispute that had threatened to disrupt as much as a quarter of all soy shipments from the world’s second-largest grower.

The trading firms are wary of serving as biotechnology police in Brazil, a role they have not had to play in the U.S. because biotech companies’ patents are protected by laws that do not allow farmers to reuse seeds year after year there.

In Brazil, where genetically modified seeds have only been legal since 2005, reusing seeds is more common and it is easier for farmers to skip out on Monsanto’s fees after buying the seeds the first season.

Soy-crushing group Abiove, which represents global firms including ADM, Bunge, Cargill and Louis Dreyfus , spent months negotiating to ensure companies are compensated for collecting and monitoring payments on Monsanto’s new Intacta RR2 Pro strain of genetically modified soy.

“Now the question is for Monsanto and each company to work out payments,” said Ricardo Tomczyk, president of soy farmers’ lobby Aprosoja in Brazil’s top-growing state Mato Grosso, after meeting with Abiove representatives this week.

While some merchants have been collecting royalties on Monsanto’s first-generation Roundup Ready soy seeds in Brazil for as long as a decade, that arrangement was a source of deep frustration as it required merchants to accept legal liability for their shipments, without any compensation from Monsanto.

The industry has been determined to avoid a similar arrangement for Intacta, a seed that includes a gene to ward off pests, which was first planted in South America last year.

The local firm that has already accepted the compensation said it did so reluctantly.

“We assume the risk of not receiving royalties from producers,” said a manager at the firm who was not authorized to speak with the press. “They (Monsanto) offered compensation for the company,” she added. She declined to say what that was.

Concerns remain that Monsanto might force firms to halt soy shipments without proof of royalty payments on cargos containing the strain.

Brazil is Monsanto’s second-largest market, making up about a tenth of its US$15 billion in net sales last year.

Monsanto has blamed a downturn in royalty payments on its mainstay Roundup Ready products for a drop in net sales of soybean seeds last year

The spat bubbled under the surface until an Abiove statement in July said the association had failed to reach an agreement after six months of negotiations, potentially stalling soy sales in Brazil.

An Abiove representative confirmed Monsanto is negotiating with individual companies but declined further comment. Monsanto said in an e-mailed statement that negotiations with Abiove companies “are ongoing and progressing.”

Bunge, ADM, Cargill and Louis Dreyfus declined comment.

Tense time

Tensions are growing between the merchants who dominate the world’s grain trade, buying from farmers and shipping to importers, and the GMO makers whose products have become deeply embedded in the global supply chain.

Brazil’s Intacta saga is part of a broad trade, copyright, environment and food-safety debate about genetic modification in agriculture that is far from resolved.

Intacta was not planted in Brazil until after China, which buys the vast majority of Brazilian soybeans, approved it last year. But farmers are worried that the trading dispute could limit buyers.

“If this hadn’t been resolved, the companies affiliated with Abiove were unlikely to trade Intacta soy,” said Tomczyk.

Early this year, China rejected 1.25 million tonnes of U.S. corn and byproducts containing the genetically modified strain MIR-162 manufactured by Swiss firm Syngenta that China has not yet approved.

Cargill, one of the largest privately held U.S. corporations, last month sued Syngenta for marketing the seeds in the U.S. even though it lacked Beijing’s approval, estimating it suffered losses of more than US$90 million. [Related story]

Brazil’s foreign ministry says the same MIR-162 corn, which has been sold in small amounts in the country since 2012, is preventing the sale of more Brazilian corn to China after the two countries signed a bilateral agreement earlier this year.

— Caroline Stauffer is a Reuters correspondent based in Sao Paulo, Brazil.

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Parana, Brazil’s No. 2 soy growing state, in southern Brazil has planted six per cent of its expected five million hectares (12 million acres) after abundant rainfall. Meanwhile, planting in top growing Mato Grosso state is less than one per cent complete.

Farmers in tropical Brazil’s grain belt generally try to plant as soon as possible after the government’s three-month ban on agricultural activity ends on Sept. 15 in order to have time to plant a second crop of corn or cotton.

Parana had planted just two per cent of its expected area a year earlier. Southern Brazil is the only soy-growing region in the country to have received above-average rainfall so far in September, according to data from meteorologists Somar.

“This year we have more favourable humidity that has stimulated planting,” said agronomist Juliana Yagushi of Parana state’s farm economic department DERAL.

Parana’s grain areas have completely recovered from a January and February drought in Brazil’s southeast that is still affecting coffee and sugarcane crops, she said. The drought was one of the worst in decades.

In Mato Grosso, which generally accounts for some 30 per cent of Brazil’s soybeans, farmers had sowed just 0.29 per cent of expected area as of Friday, in line with the 0.25 per cent planted at the same time a year ago.

“I think planting has advanced a bit more, probably just below one per cent,” Angelo Ozelame, an analyst for the state’s privately-run farm institute IMEA, told Reuters on Wednesday.

“We are still within the parameters of last year. If the rains don’t start within a few weeks it could be a problem, but for now it is fine,” he added.

Analysts expect a soy crop of between 90 million and 98 million tonnes as the country’s farmers continue to plant new fields with the oilseed. That may be enough for Brazil to pass the U.S. as the world’s top soybean producer.

While heavy rainfall was welcome in Parana, which lost some two million tonnes of soybeans to drought last year, the downpours are beginning to stall field work, Yagushi said. She said heavy rain fell on Wednesday and was expected to continue until Sunday.

Meteorologists do not expect significant rainfall in Mato Grosso until later in October, however. The state has received between 46 and 52 millimetres of rain so far this month, according to Somar.

“From now until the end of the month there will be irregular rainfall in most of the state of Mato Grosso,” said Alexandre Nascimento, meteorologist for local firm Climatempo.

— Caroline Stauffer is a Reuters correspondent based in Sao Paulo. Additional reporting for Reuters by Gustavo Bonato.

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Around 90 new meat plants in Brazil were immediately approved to export beef, chicken and pork to Russia and the South American nation is already working to increase its exports of corn and soybeans sales to Russian buyers, Brazil’s secretary of agricultural policy, Seneri Paludo, said on Thursday.

Brazil’s enthusiasm for Russia comes as Moscow’s relations with the rest of the West are at Cold War-era lows. Russia banned all imports of U.S. food products and certain goods from the European Union, Australia, Canada and Norway after President Vladimir Putin ordered retaliation for sanctions against Moscow over the Ukraine crisis.

In a further snub to Washington, U.S. intelligence contractor Edward Snowden was granted a three-year residence permit in Russia, his lawyer said Thursday. Brazil’s relations with Washington also cooled after revelations last year that the United States spied on President Dilma Rousseff’s personal emails.

As the world’s top exporter of beef, chicken and soybeans, and one of the only countries in the world with land available to ramp up agricultural production, Brazil is a clear winner from the embargo. But smaller countries like Argentina and Chile could benefit, too.

“Russia has huge potential as a consumer of agricultural commodities,” Paludo told journalists in Brasilia, comparing the “window” opened by the embargo to the “revolution” that Brazil’s exports experienced when China’s commodities market opened a decade ago.

Brazil’s beef association Abiec said 58 of the 90 plants were for beef – 27 for fresh meat, and 31 for processed. Brazilian food companies, like chicken exporter BRF SA and meat packer JBS SA, stand to benefit. The companies did not immediately respond to requests for comment.

JBS has businesses in the U.S. and Mexico as well as Brazil but it does not sell U.S. beef to Russia.

Beef products topped Brazil’s exports to Russia in the first six months of the year, Brazilian trade data showed. Brazil ships the vast majority of its soybeans to China and sent just 352,849 tonnes of soy to Russia between January and June.

The president of Brazil’s animal protein association ABPA said on Wednesday Brazil could cover U.S. chicken exports to Russia and would increase exports by 150,000 tonnes per year, though increasing pork exports would be harder.

Hong Kong replaced Russia as the top buyer of Brazilian beef in 2013 but beef association Abiec said exports to Russia “were certain to rise” in the second half of the year.

Brazil’s other agricultural exports to Russia include sugar, coffee, orange juice and bananas. In 2013, agricultural exports to Russia were worth US$2.72 billion.

Moscow stocking up

In Moscow on Thursday, the middle and upper classes browsed through aisles neatly stacked with French cheeses, Australian wines and Spanish cured meats, in what may mark a last chance to stock up on all luxury goods except caviar for at least a year while the import ban lasts.

Chile, a possible alternative for European fruit, exported US$643 million of goods to Russia in 2013, mainly in processed foods, salmon and fruit, the government’s trade body said. It declined to say if Chile is one of the countries in talks with Russia’s animal health body.

Sergio Mendes, director for Brazil’s cereal exporters’ association Anec, said Brazil would need “a good bilateral agreement” with Russia before grain exporting companies would ship significant quantities of soy and corn there.

“The main barriers are relating to crop pests and bureaucracy,” he told Reuters. Only a few specialized companies were currently exporting soy to Russia, Mendes said, though he acknowledged that Brazil is perhaps the only country that could substantially increase production if Russia’s demand peaks.

Grain traders in Argentina said Brazil would benefit most from the food bans, though there may be a residual impact for Argentine commodities if Brazilian supplies aren’t enough to satisfy Russia’s need for grains, which they said was unlikely.

“The biggest opportunities will likely be for oils and meals rather than grains, but we think that Russia will turn to Brazil as a supplier first, given that Brazil is part of BRICS,” said one trader, referring to the economic bloc that also includes Russia, India, China and South Africa.

Russia has only bought small amounts of Argentine soymeal and soybeans in recent years, according to data from the agriculture ministry.

— Caroline Stauffer and Silvio Cascione report for Reuters from Sao Paulo and Brasilia respectively. Additional reporting for Reuters by Rosalba O’Brien and Anthony Esposito in Santiago, Maximiliano Rizzi in Buenos Aires and Fabiola Gomes in Sao Paulo.

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