March 5, 2014
Oil World and Informa have lowered its forecasts for South America's soy production, due to poor weather conditions in Brazil.
Informa, citing both a lower estimate for soy and weaker yield hopes, downgrades its forecast for Argentina's forthcoming soy crop by 3 million tonnes to 54 million tonnes. That figure, representing an increase of nearly 5 million tonnes on-year, is in line with the forecast from the USDA, if above an estimate last week of 53 million tonnes from the Buenos Aires grains exchange.
Informa also cut its forecast for the Brazilian soy crop, by 900,000 tonnes to 88.8 million tonnes. That figure is below the 90.0 million tonnes forecast by the USDA, whose data set global benchmarks, but and in line with an estimate from Brazilian industry association Abiove last week, although some other observers have far lower numbers, citing the weathers extremes of too little or too much rain which have hit southern and western areas respectively.
For a second successive week, Oil World cut its forecast for the Brazilian harvest, this time by one million tonnes to 84 million tonnes, still a record, but by a modest 2.5 million tonnes.
"Brazilian soy crop prospects have further deteriorated," Oil World said, adding that the reduced prospects "will considerably squeeze world soy supplies, considering the tightness in the US and the reduced crops harvested in China and India".
The group noted excessive wetness in Mato Grosso, Brazil's top soy producing state, where rains are to return this week to delay the harvest, after some drier weather last week.
Oil World's comments follow a 500,000-tonne reduction to 26.4 million tonnes in the forecast by Imea, the agricultural economics institute, to its estimate for the crop in Mato Grosso, the biggest soy growing state.
Meanwhile, the farm department in second-ranked Parana has estimated losses at two million tonnes, with the potential to hit 2.5 million tonnes if dry weather persists.
Aprosoja, the Brazilian soy growers' association, has pegged losses from heat to the soy crop in Rio Grande do Sul, Brazil's third-ranked producing state, at 20% in the worst affected areas.
