April 13, 2005

Global soybean output to rise, Brazil harvest hit by drought

Global soybean production for 2004-05 is forecast to reach 219.2 million tonnes, with stocks expected to increase 15.2 million tonnes to 52.6 million tonnes.

Higher inventory levels this year will lessen the chance of soybean prices rising despite reports that production may suffer in the next few years due to soy rust infection spreading across the United States, and a fall in Brazil's crop production.

The drought that hit Brazil in February has turned an expected record soybean harvest into a merely satisfactory one. Damage to the crop, however, is limited to isolated regions, with the exception of two southern states where it is more widespread.

According to a USDA report on April 5, Brazil's production is now estimated at 55.9 million tonnes, with expected average overall yields of 2.5 tonnes per hectare. The area under cultivation is projected at 23 million hectares.

Soybean production in 2004 was estimated at 59 million tonnes, 2003 at 52.9 million tonnes and 2002 at 52.4 million tones.

Southern Brazil was the worst affected by the drought which greatly reduced soybean production in the southern state of Rio Grande do Sul, and a considerable one on production in Parana.  The two states each contain about one-sixth of Brazilian soybean area. 

The drought's most damaging effects took place in February, with dryness and higher than average temperatures right at the time of flowering.

The country's harvest is nearly 60 percent complete, with 75 percent harvested in Parana, 70 percent in Mato Grosso, 60 percent in Goias, and 15 percent in Rio Grande do Sul.  Currently, the concern is the delay of the harvest in other states due to heavy rain and difficult harvesting conditions.