December 31, 2010

 

Brazil's no.2 soy state looks forward to early harvest

 

 

Soy growers in Brazil's Parana state will have an earlier-than-usual harvest, and they are looking forward to reap a premium for the produce as a result.

 

Parana in the south of the world's no.2 soy producer, got a head start with soy planting this year with plentiful rain that did not reach the top soy state Mato Grosso until weeks later, delaying the sowing of the oilseed there. Mato Grosso is usually the first to harvest its soy.

 

Soy in Parana, second to Mato Grosso for output, should reach the market by late January or early February and expected strong demand by then will guarantee firm prices for growers, said Felipe Prince, analyst at the Agrosecurity consultancy.

 

Growers across the country already looked set for a better harvest in terms of price in 2011, with Chicago soy futures <SF1> trading roughly 35% higher than a year ago.

 

"It could go up further, depending on how Argentina's harvest turns out with the dry weather," Prince said.

 

Somar Meteorologia forecast Brazil's soy areas would get widespread rain in the centre and north, but grain-growing states in the south would be dry in the next week.

 

Agronomist Otmar Hubner, of the Agriculture Ministry's Department for Rural Economics (Deral), said half of Parana's soy farms had crops now in the grain formation phase. "It's a more critical stage and we need to keep an eye on the climate," he said.

 

The La Nina weather anomaly that kept Mato Grosso dry in the normally wet spring, left growers nervous about sowing with the likelihood they would have to replant if seedlings withered away in the absence of rains.

 

Nonetheless, the government's crop supply agency Conab has forecast a harvest of 68.6 million tonnes, just shy of the record 68.7 million tonnes reaped in the previous season. Conab is due to issue an updated crop forecast on January 6.

 

Hubner said farm gate prices for the grain were nearly BRL44 (US$26.34) per 60-kg bag on average in December and reached BRL46 (US$27.54) on Wednesday (Dec 29). This time a year ago, prices were around BRL40 (US$23.95).