November 9, 2004

Celeres Lowers Brazil 2004-05 Soy Crop View to 63.9 Million MT

Brazilian agricultural consultancy Celeres lowered its Brazilian soybean output estimate for 2004-05 from 64.2 million tons last month to 63.9 million metric tons in its November estimate.
 
The reduction was based on lower planted area and yield estimates as farmers reacted to projections that prices will remain in the doldrums for the next year.
 
The Celeres estimate is lower than the 64.5 million tons forecast by the US Department of Agriculture, but significantly higher than the 60.2 million tons predicted by the Agriculture Ministry last month.
 
Output is still pegged some 25% higher than last season as yields return to normal after last year's weather, disease problems and planted area increases.
 
Planted area is seen totaling 22.83 million hectares, falling from 22.9 million hectares forecast in October but sharply higher than the 21.28 million hectares planted last year.
 
Celeres lowered its planted area estimate for Mato Grosso, Brazil's No. 1 soy state, by 106,000 hectares to 5.69 million hectares due to high costs. In compensation, the area estimate for Parana, the No. 2 state, was raised by 51,000 hectares.
 
Average yields are seen totaling 2,798 kilograms per hectare from 2,802 kg/hectare last month but much higher than 2,397 kg/hectare last year. However, a clearer indication of yields this season can only be seen from December when the whole crop is planted.
 
With the jump in output, total Brazilian supply is expected to rise 22.8% to 67.0 million tons next year.
 
The pace of forward sales of 2004-05 soybeans remains extremely slow with only 11% of potential output sold up to Oct. 5, compared with 46% at the same stage last year and a five-year average of 32%, according to Celeres' soy analyst Anderson Galvao Gomes.
 
Despite slightly increased sales over the last couple of weeks, Brazilian farmers still have an uncommonly large portion of the last crop in their warehouses.
 
Up to Oct. 5, farmers had sold 88% of their crop compared with 97% at the same point last year and a five-year average of 99%.
 
Brazil is the world's No. 2 producer and exporter of soybeans.