NAPERVILLE, Illinois, Nov 21 (Reuters) - Insufficient rainfall in Brazil’s top soybean and corn growing state of Mato Grosso has raised questions about the country’s soybean potential. Some industry participants believe a record crop is still possible, but some of the recent conditions stand out.

Forecasts late on Tuesday suggest that Mato Grosso’s heaviest crop region will finish November with total rainfall around 45% below normal, and that follows a 35% deficit in October. Temperatures over the last month have been noticeably above average, compounding the issue.

The Vegetation Health Index (VHI), a U.S. government product, suggests vegetation in Mato Grosso may be in the worst state since 2015, which preceded one of the state’s worst growing seasons. The other comparable one was in 2020, though the following soybean crop was normal.

October and November 2020 rainfall in Mato Grosso’s main region was nearly identical as in 2023, and average soybean yields still resulted in 2021 despite below-average rainfall in December and January, too. That does instill some hope for this year’s crop, as rainfall timing may have been at play.

Daily root zone soil moisture in Mato Grosso’s heaviest crop regions is the lowest for the date in at least seven years after touching the highest level for that date in at least seven years as of mid-September.

Soils in Mato Grosso lack in nutrients and quality as compared with the best U.S. Midwestern soils, which can sometimes sustain a crop with minimal moisture. But Mato Grosso relies on abundant and continuous rainfall, especially at this time of year for soybeans.

Both 2016 and 2021 featured poor second-corn yields in Mato Grosso, so the current VHI is in poor company as it relates to corn prospects. The soybean crops were more delayed in those years than in this year, adding some separation, but dry risks from El Nino will need constant monitoring.

The impacts on Brazil’s exports are very significant if Mato Grosso has trouble. On average over the last three calendar years, Mato Grosso was responsible for 29% of Brazil’s soybean exports and nearly two-thirds of corn shipments. The state is expected to grow 27% and 38% of Brazil’s total 2023-24 soy and corn crops, respectively.

Nationally, Brazil’s soybean planting was 68% as of last Thursday, the lowest rate since 2019-20 and behind the year-ago 80%. However, reports from four years ago said the pace at that time was in line with the five-year average, suggesting this year’s delays should not be too severe.

The real problem would arise if a significant amount of beans in Mato Grosso or surrounding states needed replanting, because that would push unfavorably on the second-corn window.

Some farmers in Mato Grosso have ripped up poorly established soybeans in favor of cotton. Most cotton in the state is planted as a second crop behind soybeans as is corn, but this year’s first cotton crop is expected to reach 20% of the total versus a normal 10% to 13%.

Mato Grosso grows about 72% of Brazil’s cotton crop, and this year farmers there are reportedly optimistic about cotton prospects versus those for corn, leading to the idea that second-corn plantings will contract on the year while cotton plantings rise. Karen Braun is a market analyst for Reuters. Views expressed above are her own.

(Reporting by Karen Braun Editing by Matthew Lewis)