Down, but Brazil Soy Production Still Expected Heavy



Dry weather may trim some 2018-19 Brazilian soybean production, but at this point it doesn’t appear to be much.

Brazilian statistical agency Conab on Thursday pegged this year’s Brazilian soybean crop at 118.8 million tonnes, down from its December estimate of 120.07 million and below the USDA’s latest forecast of 122 million. However, the estimate still came in on the high side of pre-report trade expectations and falls just slightly below last year’s record crop of 120.3 million.

Brazil soybean exports for 2018-19 were forecast at 75 million tonnes, unchanged from a month earlier but down 8.86 million from a year earlier.

The still-large 2018-19 Brazilian soybean production estimate helped to pressure soybean futures to sharp losses today.

Overly dry weather, which persisted through much of December, has hurt production prospects in Mato Grasso, Brazil’s largest soy-producing state, along with portions of No. 2 producer Parana, Minas Gerais (around 11% of total Brazilian output), and across the border into Paraguay.

Overall, around 25% of the total Brazilian soybean crop is thought to be suffering from some degree of dry weather stress. Higher-than-normal temperatures have added to the soybean crop’s woes.

Ordinarily, dry weather now would not be a major problem for the Brazil soybean crop. But because of ideal earlier conditions and quick planting, the 2018-19 crop is much further along in its development compared to earlier seasons, meaning the beans are suffering during the critical pod-fill stage. In a few of the very earliest maturing regions of Brazil, the soybean harvest actually started just before Christmas.

Meanwhile, Conab put the total 2018-19 Brazil corn crop at 91.19 million tonnes, up slightly from its December number and further above the previous year’s crop of 82 million. However, today’s estimate was still below the USDA estimate of 94.5 million.

Source: DePutter Publishing Ltd.

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