May 10, 2024
Heavy rains hold back soybean harvest in Rio Grande do Sul, Brazil
The outlook for the soybean harvest in the Brazilian state of Rio Grande do Sul, which was on track to become the second largest producer in Brazil behind Mato Grosso, is deteriorating swiftly after torrential rains flooded fields, with about a quarter of beans to be reaped.
The impact of the downpours, which left entire cities and farms flooded, could cause a drop in production of up to 15% in the state, Leandro da Silva, a manager at farm cooperative Cotrisal, said on May 3. He now sees output at between 19 million metric tons and 20 million metric tons.
Potential losses in Rio Grande do Sul bolstered soy futures in Chicago as they could reduce overall output in Brazil, the world's largest soybean producer and exporter.
"There will be quantitative and qualitative losses," Silva said. "For me, what remains to be harvested will be 30% to 40% damaged (on average). In the most affected areas, you will have 70% to 80% of beans damaged."
Before the heavy rains, national crop agency Conab had Rio Grande do Sul's soy output at 21.89 million tonnes and state crop agency Emater had it at 22.25 million tonnes.
"It's too early to talk about numbers but, yes, we are going to cut a part of Rio Grande do Sul's production estimate," said analyst Luiz Roque at Safras & Mercado. "It will depend on what you can save from the affected crops, but there is the possibility of reducing the Brazilian harvest projection due to the problems in Rio Grande do Sul."
Emater did not change its production forecast in a weekly report released on May 2, but noted rains were disrupting harvesting of soybeans in Rio Grande do Sul, which still has 24% of the soy area to be reaped.
Conab will revise national projections on May 14. Its April soy output forecast for Brazil production in the 2023/24 cycle is 146.5 million tonnes, 5.2% lower than in the previous season as a drought in top grower Mato Grosso state slashed output there.
Analysts estimated up to 40% of the center and south soy areas of the state remain to be harvested, and about 10% in the north, making it difficult to estimate yields and losses at the moment.
They said around five million tonnes of soybeans are likely "at risk" due to rains and flooding, but suggested that final losses could be lower at around one million tonnes to two million tonnes.
Broker Adelson Gasparin, based in Passo Fundo, initially projected potential damage to 2.8 million tonnes of soy, but that can change as yield loss will vary in the different affected regions.
"The market will soon discover that the Brazilian harvest is far from 155 million tonnes" estimated by the US Department of Agriculture, said analyst Fernando Muraro at AgRural.
- Reuters