February 28, 2007

Brazil's soybean crop smaller than projected

Bad weather means Brazil's soybean crop this year will be smaller than expected while Argentina's harvest is looking better, Hamburg-based oilseeds analysts Oil World said.

The firm said while Argentine soybean crop is excellent, the crop losses in Brazil have become larger, thus, reducing the country's crop projections.

Oil World in early February estimated Brazil's soybean crop this season will probably reach no more than 56.0 million tonnes, still up from the 53.4 million tonnes harvested last season.

Recent forecasts of Brazil's crop this year have included 56.3 million tonnes from Brazil's state agency Companhia Nacional de Abastecimento (Conab), and 56.4 million from state statistics institute IBGE or the Instituto Brasileiro de Geografia  Estatistica.

Soybean crop losses in South America have added to recent strength in soybean futures, Oil World said.

Oil World said the biggest losses so far have occurred in northern Mato Grosso, Brazil's biggest soybean growing state. Huge shortfalls were also reported in southern Mato Grosso, Mato Grosso do Sul and Goias due to recent heavy rainfall which prevented harvesting of mature soybeans.

Another cause of concern is the spread of Asian rust fungus which have been a main crop problem in the past three weeks as it spread to more areas this year, particularly in Brazil and partly in Argentina, it said.