October 23, 2010

Brazil's new soy crop to hit record level

Brazil's 2010/11 soy crop is expected to total a record 69.6 million tonnes, up from a revised 69.0 million tonnes last season, analysts said Friday (Oct 22).

Planted area is estimated at 24.1 million hectares, up from 23.5 million hectares in 2009/10. The area is slightly bigger than previously forecast as some corn land in the south was shifted to soy, experts said.

Yields are forecast at 2.89 tonnes per hectare, down from 2.94 tonnes last season, when conditions for crop development were exceptionally good. In 2008/09, yields came to 2.63 tonnes per hectare.

The delay in rains over No. 1 soy state Mato Grosso has helped drive up international futures prices but may not be as bad as the market suggests.

Rainfall in the center-west is only three weeks behind schedule, and weather forecasts are positive and still point to strong yields this season, according to a soy specialist.

The La Nina weather phenomenon has delayed the normal arrival of spring rains this planting season, which started in mid-September and ends in December.

Chicago soy futures rallied to a 14-month high over the past few months to more than US$12 a bushel on concerns that drought would hurt the soy crop of Brazil, the world's second-largest producer after the US.

Mato Grosso producers started early planting of the new crop about two weeks ago and have sown more than 15% of the expected area, according to local reports. That is about half the area planted this time last year.

Comparing this year with last, however, could be misleading given the effects of El Nino on the 2009/10 crop that brought early and ample rainfall.
 

Most weather forecasters and analysts expect rains to normalise in the main soy-growing regions by the end of October or early November as tropical moisture from the Amazon region pushes down into the center-west.