February 12, 2014
Downplaying the impact of hot and dry weather, Brazil restated its claim as the top global producer of soy, while also maintaining an upbeat stance on corn output, despite foreseeing a drop in safrinha sowings.
Although Conab, Brazil's official crop bureau, cut its forecast for the domestic soy crop by 320,000 tonnes to 90.0 million tonnes, the figure was still enough to promote the country as the top producer of the oilseed.
The USDA, which also pegged Brazil's soy crop at 90.0 million tonnes, estimates the US harvest for 2013-14 at 89.5 million tonnes.
Conab's forecast came despite the concerns over hot and dry weather in some central area - notably the key cane producing state of Sao Paulo and the coffee belt heartland of Minas Gerais - which have sent prices of sugar and arabica beans higher.
The bureau also cut its forecast for soy output in Sao Paulo and Minas Gerais, due to lower yield expectations, but by a modest 200,000 tonnes to a combined 5.85 million tonnes.
In Minas Gerais, "crops appear to be developing well, with the first crops showing good yields and good quality product, but only with the advancement of harvest will be possible to assess whether there will be any impact arising from January's drought", Conab said.
The bureau made a larger downgrade to its forecast for domestic corn production, by 3.5 million tonnes to 75.47 million tonnes. However, this reflected expectations of a dent from low grain prices, rather than poor weather, to sowings of second-crop, or safrinha, corn, which in some areas is planted as a follow-on from the soy currently being harvested.
Plantings will fall 5.8% to 3.16 million hectares in Mato Grosso, due to fears of impact on profitability caused by "high fees" for transport crop from farms to port through Brazil's extensive rail and road infrastructure.
The overall Brazil corn harvest estimate of 75.47 million tonnes remains above that of many other commentators, including the USDA, which pegged the crop at 70.0 million tonnes.
