February 13, 2007

Rains causing soy crop losses in Brazil's Mato Grosso

Persistent rainfall over Brazil's centre-west soy belt will lead to crop losses in Mato Grosso state, market analysts said Monday (Feb 12).

"There is a lot of soy ready to harvest in north Mato Grosso but the rain is not letting up in many areas," said Flavio Franca, a soy market analyst at Safras and Mercado. "It's reached a point where the excess rain is becoming alarming and we can be more sure about reductions coming in the region's crop estimate."

Mato Grosso is Brazil's leading soy producing state, expected to harvest more than 15.2 million metric tonnes of soybeans in the 2006/07 season, the National Commodities Supply Corp (Conab), said on Thursday.

Once soybeans are ready for harvesting, they cannot stay in the field for longer than a week or they'll start losing quality. Rains soak the beans and often turn them green, sapping much of the bean's oil content.

"Places like Campos de Julio, Sapezal, these towns will definitely lose some production. We just don't know how much yet," said Paulo Gilioli, a Mato Grosso-based broker for grain brokerage firm Cerealpar.

According to local weather service ClimaTempo farmers in six major north Mato Grosso soy towns will have sunny mornings to harvest, but rain is expected in the afternoon and evening hours all week.

Conab put Brazil's 2006/07 crop at 56.3 million tonnes, 5.4 percent greater than the 2005/06 crop.

Brazil is the world's no. 2 soy producer behind the US.