New cuts in Brazil’s soybean output are expected in February as the weather remains unfavorable in Paraná, Santa Catarina, Rio Grande do Sul and parts of Mato Grosso do Sul for the development of the crop.
The month has already started with many local consultancies slashing their estimates, mainly due to lower yields caused by the drought in southern states.
None of the experts heard by Fastmarkets Agricensus wanted to put a figure on how low the crop could go, but all of them expect more to come.
On Wednesday, StoneX cut its estimates to 126.5 million tonnes, a 5.6% drop from the previous 134 million tonnes forecasts and 12.9% below the 145.1 million tonnes record production initially estimated for 2021-2022.
Local consultancy Datagro has also reduced its estimates to 130 million tonnes from 142.05 million tonnes previously expected and 144.06 million tonnes initially forecast.
The acreage was dropped by 0.15% from the previous estimates to 40.51 million hectares, but still 3,7% up versus 2020/21.
“The possibility of new losses is not discarded as, after an improvement in the weather in the last 15 days, there is a lack of rain in southern Brazil again,” Flávio Roberto de França Junior, Datagro’s grain coordinator told Fastmarkets Agricensus.
França stated that the west of the southern Brazilian states was hit hard by the lack of humidity.
“The crops were off to a good start and some lack of rain was already expected but not as much as happened,” he stated.
However, in the center and north of Brazil, the rain is getting in the way of harvesting, which could reduce the quality and yield of the soybean crops.
Last Monday, the soybean output estimates were slashed yet again to 128.5 million tonnes by local consultancy Agrural.
AgResource reduced its estimates even further and now expects Brazil to harvest 125.04 million tonnes versus the 131.04 million tonnes previously estimated.
“If the weather remains unfavorable, mostly in Rio Grande do Sul, where there are crops still in the development stage, there will be more cuts”, Safras & Mercado analyst, Luiz Fernando Roque, told Fastmarkets Agricensus.
The southern state is the last one to sow and harvest the oilseeds in the country and has been facing a lack of rain for the second year in a row.
According to Brazilian meteorological agency Inmet, there is no rainfall volumes above 40 millimeters accumulations expected for Rio Grande do Sul in the next two weeks.
The local consultancy expects the country’s production to reach 132.3 million tonnes and will update its forecast on February, 11. “Our new figure will definitely be lower than that”, Roque added.
Next week the country’s food agency Conab will also update its numbers. The agency, however, is known for its conservative behavior when it comes to changes in its output forecast.
“Conab’s report will probably bring a big cut but not as much as the market has already presented”, França added.
Last month, Conab dropped its 2021-2022 soybean output estimates to 140.5 million tonnes, 1.6% lower than December’s forecast.
The figure is still 2.3% higher than 2020-2021’s output.
Keep up to date with the soy market and the trends shaping the agricultural landscape, visit our dedicated soy market page.