October 9, 2008


Brazil 08-09 soy estimate within expectation


Brazil's first 2008-09 soy crop estimate by the National Commodities Supply Corp. (Conab) is largely within expectations, showing a slight increase in the planted area, analysts said Wednesday (October 8).


Conab said Brazil's planted soy area is seen between 21.5 million hectares and 21.9 million hectares - up 1.3 percent to 3.2 percent - from 21.3 million hectares in the 2007-08 season.


Brazilian farmers should harvest between 60.1 million and 61.2 million tonnes of soy in the 2008-09 crop, compared to 60.02 million tonnes from the 2007-08 soy crop, Conab said.


"We initially expected an increase in the planted area of soy between 2 percent and 4 percent, but with the recent turbulence in the financial markets and lower soy prices, we already expected closer to a 2-percent (increase)," said Steve Cachia, a soy analyst at grain brokerage firm Cerealpar.


Cachia said that the lower soy prices and rising costs for fertilizers in recent months and the more recent credit crunch was causing analysts to revise their initial expectations for the size of the soy crop.


"Conab's data won't have any impact on soy prices because they were already expected," he said.


November soy on the Chicago Board of Trade rose 38 cents to US$9.64 per bushel on Wednesday, after plunging from nearly US$14 a bushel a few months ago.


Conab's upper range estimate is also close to local agribusiness consultancy Celeres, which said Monday the total soy output should be 61.6 million tonnes and planted area should be 21.9 million hectares in 2008-09.


A chief broker at a major US multinational said that Conab's estimate is "conservative."


The broker expects over 62 million tonnes of soy and a planted area of 22.1 million hectares, with an average yield of over 2,800 kilogrammes per hectare.


The broker said that all of the seeds, fertilizers, and chemicals have already been purchased by farmers for the 2008-09 soy crop, so there won't be a significant change in the area planted.

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