February 5, 2013

Bad weather affects Brazil's soy crop

South America's deteriorating weather, which has put down hopes for Argentina's soy crop, is starting to raise doubts of Brazil's too, dashing expectations of bumper yields.

The wet weather in central Brazil, including in Mato Grosso, has until now been seen as an impediment to harvest progress and logistics, but a support to yields. Indeed, upgrades to estimates for Brazil's 2012-13 soy crop have to some extent balanced downgrades to thinking on Argentina's, which is being sapped by hot and dry weather.

Informa on Friday (Feb 1) raised its estimate for Brazil's soy harvest by 1.1 million tonnes, to 84.0 million tonnes, but cuts its forecast for Argentina's by 3.9 million tonnes to 54.5 million tonnes.

However, on Monday (Feb 4), Brazil-based AgRural called time on rising hopes for Brazilian soy, lowering its estimate for the crop by 1.0 million tonnes to 81.2 million tonnes, warning that the heavy rains had begun to hurt yields too.

"Due to humidity, the quality of the beans harvested up until now has been below expectations," the consultancy said.

The comments were echoed by Michael Cordonnier, the influential crop scout, who warned of "more and more reports of poor seed quality" from the early harvest.

The results bore out a strategy among Brazilian farmers of splitting soy sowings equally between early, medium and late maturing varieties. Meanwhile, further south, in Rio Grande do Sul, where dryness has tested crops, weekend rains had disappointed.

Cordonnier said he was sticking by a forecast of 81 million tonnes for Brazil's soy crop, which would still be a record. However, he did lower by one million tonnes to 51 million tonnes his forecast for Argentina's soy crop.

The USDA, whose data set global benchmarks, pegs the harvest at 54 million tonnes. However, a report from its Buenos Aires bureau overnight estimated the crop at 53 million tonnes, warning that "since mid-December, it has been hot, dry, and there has not been significant rainfall in much of the major production area".