October 9, 2006

Soy planting slides in Brazil

US top soy competitor backs off due to poor local prices and unfavourable exchange rate.

The planting intentions for soy in Brazil for the 2006-07 season slid 7.6 percent, according to local media reports. Most reductions coming from the centre-west and south-east could be attributed to factors like declining local prices, an unfavourable foreign exchange rate and farmers' preference for more profitable crops..

In spite of that, southern farms in Parana and Rio Grande do Sul  boosted planted area by 1 percent due to lower overhead costs and proximity to ports. Though most soy growers in the country were yet to start planting, the National Commodities Supply Corp., or Conab  estimated the crop to hit between 53.5 and 55 million tonnes. Last year's harvest was  about  53.4 million tonnes.

In the worst case, however, crop estimates could end up  somewhere around 51 million tonnes,  due to unforeseen weather and problems in actual planting in the state of Mato Grosso. Farming has already begun in the northern areas of the state and if all goes well, the rest of the country should start in the next two weeks.