June 12, 2009
Intense drought hits major soy regions in Brazil
Major soy producing nations of the Parana region, Brazil and Paraguay suffered irreversible damage to their crops due to intense drought in November to December.
Hardly any rainfall was received for 60 days, stunting plants that failed to recover when rainfall improved January. The Rio Grande do Sul soy planting was delayed by dryness, but there was no lasting damage.
Conditions improved for a time in January and February prompting Argentina growers to plant extra soy, but drought returned with a vengeance in March affecting all of Argentina, Paraguay and Rio Grande do Sul in South Brazil.
The double-whammy effect of early and late drought forced Argentina and Paraguay crop estimates steadily lower.
USDA's June report pegged Argentina soy production at 32 million tonnes, compared with 38 million tonnes originally and 46.2 million tonnes last season.
Paraguay soy estimates likewise have plummeted, finishing at 3.8 million tonnes and 45-percent lower than last year.
Brazil soy fared better than Argentina or Paraguay, due to a favourable crop in the tropical soy states.
Nonetheless, a poor crop from Parana and late season drought in Rio Grande do Sul reduced Brazil production estimates to 57 million tonnes to 57.1 million tonnes, compared with 61 million tonnes last year – a 6.5-percent reduction.
South America soy production may finish at 94.9 million tonnes, down from 116 million tonnes last year, producing a 21 million tonnes deficit that increases US export potential.
