January 12, 2009

Rain in southern Brazil should help the soybean crop, but concerns remain about the crop, especially in Rio Grande do Sul state, according to local weather service Somar.

 

The south of Brazil, in particular Parana, the No. 2 soy-growing state, and Rio Grande do Sul, the No. 3 soy-growing state, has faced prolonged dry weather since mid-November.

 

Celso Oliveira, a meteorologist at Somar, said the current rain in Parana and Rio Grande do Sul should help the new 2008-09 soy crop, especially in Parana.

 

The whole region of Parana will receive between 30 millimetres and 50 millimetres of rain, while Rio Grande do Sul will receive just 30 millimetres of rain across the north of the state until Wednesday, he said.

 

Cities such as Passo Fundo and Santa Angelo got more than 20 millimetres of rain on Friday, while Santa Maria received 11 millimetres, according to Somar. Temperatures hovered around 30 degrees Celsius in the main soy-growing north of Rio Grande do Sul, said Somar.

 

The situation is worse in Rio Grande do Sul because the state will receive less rain for a shorter period compared to Parana, Oliveira said.

 

Rain isn't expected in Rio Grande do Sul between January 15 and February, and this period is important for the development of the soy crop, he added.

 

David Brew, a broker at Brasoja in Rio Grande do Sul, said the recent rains have helped soy farmers in the state. "We're not in fantastic shape, but recent rains were very helpful," he said.

 

Brew warned that farmers are talking of a million tonnes of soy being lost in the state, but most are still carefully assessing the damage. Soy are robust and can bounce back when it rains, he said.

 

"But it's certainly a worry if the rain stops after Jan. 15," he said, noting that weather forecasts can be unreliable.

 

Steve Cachia, a grains analyst at brokerage firm Cerealpar, agreed there's concern about the rain coverage, with some areas in the South getting enough rain and others facing a drought, he said.

 

But it's important to wait to assess the full extend of the damage, he said.

 

Brazil is the world's No. 2 producer of soy after the US.