February 27, 2007

Mato Grosso rains not seen cutting Brazil's soy output

Months of excessive rainfall in northern Mato Grosso state will not lead to any reductions to Brazil's 2006/07 soy crop, market analysts said Monday (Feb 26).

"Any losses in Mato Grosso because of the rain will be more to do with quality than quantity," said Anderson Galvao Gomes, a soy consultant for Celeres. Quality losses are due to poor soybean development and less

oil content in the soy because of the wet weather. Many farmers will receive less for their soybeans in that part of the state. Mato Grosso is Brazil's leading soy-producing state.

"Any losses there will be made up by super production elsewhere," Gomes said, citing Mato Grosso's other regions, Mato Grosso do Sul, Parana and Rio Grande do Sul states.

Mato Grosso should harvest at least 14.7 million tonnes of soybeans out of a total crop estimate of 57.8 million tonnes, according to a report released Friday by Safras & Mercado, an agribusiness consulting firm.

The Safras & Mercado report did not reduce Mato Grosso's soy crop estimate from its previous monthly report even though soy farmers in rain-soaked regions were estimating losses close to 10 percent of total output earlier this month.

"The harvest is going OK nationwide. I think you will see some losses in some towns in the north of Mato Grosso, but that's not going to stop this from being a record-breaking crop," said Flavio Franca, Safras & Mercado's soy analyst.

On Monday, agribusiness consulting group, Agroconsult, launched its 2006/07 crop tour in Brasilia. Agronomists from Agroconsult will be accompanied by representatives of various agribusiness lenders and companies to provide a final crop estimate for Brazilian soy.

Brazil is the no. 2 soy producer behind the US.