March 23, 2011

Oil World cuts Brazil's soy yield estimate once more

Brazil's 2011 soy harvest may drop to 69-70 million tonnes from 70-71 million tonnes as projected last week due to the late rain damage, Oil World stated on Tuesday (Mar 22).

The crop might even fall below the 68.6 million tonnes in 2010.

In February Oil World said Brazil's 2011 soy crop could reach 72 million tonnes but repeated rain has damaged the harvest in the world's second largest soy exporting country. Oil World cut its estimate to 70-71 million tonnes last Tuesday (Mar 15).

"Total soybean crop damage is estimated anywhere between 1.3 and two million tonnes. While a record crop was still standing in the fields at the end of February, we now believe that actual soybean production will turn out between 69 and 70 million tonnes compared with earlier estimates of 71-72 million tonnes," Oil World said.

"Some estimates even suggest that the final crop will be close to or slightly below last year's," the analysts added. It is still unclear how much damage has occurred after the heavy rain and more rain is expecting in the coming week, it said.

Quality damage is also a major concern with Brazilian new crop soy because of the usually high moisture content while the rain has also disrupted inland transport and port work, it said.

"Additional delays in Brazilian exports of soybeans and products will shift business to US origin," it said.