Join the conversation:

American staff extends downgrade of Brazilian soy

American staff extends downgrade of Brazilian soy

Posted by Laura Zúñiga on November 27, 2014

US officials joined commentators cutting Brazilian soybean production prospects thanks to a slow planting season, but maintained expectations of a, small, rise in exports to a record high.

The US Department of Agriculture bureau in Brasilia pegged the Brazilian soybean crop, the world's second biggest after that of the US, at 92.0m tonnes.

While "still a record", and up 5.3m tonnes year on year, a harvest at that level would be 2.0m tonnes lower than the USDA's official estimate, which is up for revision in two weeks' time.

The forecast comes amid a series of downgrades by private commentators of the crop to account for a sowing season which, while making rapid recent progress – with Agrural estimating that as of Friday farmers had planted 76% of their crop, only three points behind last year – made a slow start, thanks to dry weather.

The USDA bureau kept its forecast for sowings at 31.5m hectares but noting the sowing delay, and Weather problems across the country", reduced its yield forecast.

'Unlikely to be realised'

The revision follows downgrades from the likes of Michael Cordonnier, the respected crop scout, Oil World, which has forecast a sub-90m-tonne crop.

Most other commentators are ground around the 91m-94m-tonne range, with Conab, Brazil's crop bureau, foreseeing output of 89.3m-91.7m.

However, US-based Lanworth is still sticking by a far higher estimate, of 98m tonnes, terming Conab's forecasts, largely based on downbeat hopes for southern Brazil, as "unlikely" to be realised" without significant drought" in that part of the country.

For the southern state of Parana, Conab is forecasting a soybean yield "below last season's drought-impacted levels and the lowest since 2006", Lanworth said, forecasting itself an above-trend result in southern Brazil.

However, much may depend on the formation of an El Nino weather pattern, which Lanworth factored in as having a 70% probability, and which is linked to warmer and wetter conditions than normal in southern Brazil and northern Argentina.

Societe Generale earlier this week, flagging the potential for an El Nino, forecast "varied soybean yields across South America".

Knock-on effects

The USDA bureau kept by its forecast for Brazilian soybean exports of 47.0m tonnes despite the drop in production, and the planting delays which, in implying a late harvest, would have a knock-on effect too on the early availability of crop supplies for shipment.

Nonetheless, that would represent growth of just 1.1% year on year, well below the 10-year average of 9.8%.

The slow sowing pace is also seen as a threat to the safrinha sowings of corn and, increasingly, soybeans planted as a follow-on crop, on land vacated by the harvest early in the calendar year.

The seeding window for safrinha corn is typically seen as closing in late February.

Anti-rust rules

However, the bureau also flagged the regulatory moves within Brazil to cut plantings of safrinha soybeans, in an effort to tackle the spread of diseases which have become increasingly prevalent.

Mato Grosso, Brazil's top soybean producing state, last month extended to May 1-September 30 the period when farmers are not allowed to have the oilseed in the ground.

"The purpose of this measure is to reduce the threat of the Asian rust fungus," the bureau said.

Officials in Goias limited to October 1-December 31 the soybean planting window in the state, "in order to avoid a safrinha crop".

"This is another example of the steps taken in Brazil to continue to control diseases that can hurt the future of the soybean industry," the bureau added.

Link To Full Article: 

Facebook comments



Monthly newsletter featuring articles hand picked by our country managers from the best content across PanamericanWorld.



Monthly newsletter featuring articles hand picked by our country managers from the best content across the Caribbean Region on PanamericanWorld.

PANAMERICANWORLD COUNTRIES