Aug 28, 2014
Home| Tools| Blogs| Discussions| Sign UpLogin

South American Soybean Harvest Seen Lower due to Heat

February 11, 2014
BrazilCropUpdate (8)
  

Feb. 11 (Bloomberg) -- Soybean production in South America may be as much as 5 million metric tons less than previously expected because of damage from hot, dry weather in Brazil and Argentina, Oil World said.

Production on the continent may be 3 million to 5 million tons less than most analysts were anticipating four to five weeks ago, the Hamburg-based researcher said, without providing a new forecast for total South American output. Oil World said in a report released Jan. 28 that the soybean harvest in the top five South American producers would be a record 158.8 million tons, 9.6 percent larger than the prior year.

"Unusually dry and hot conditions have resulted in partly irreversible damage in several parts of Brazil and Paraguay," Oil World said. "In Argentina, it was partly too dry during the past four to six weeks and has now become much too wet in parts of the major production belt, creating local flooding and jeopardizing soybeans and other crops."

Soybean futures on the Chicago Board of Trade, the global benchmark, climbed 3.8 percent last week, the biggest weekly gain since August, amid concerns about South American output. The oilseed slid 8.3 percent last year on the outlook for record global production.

Crops in Brazil, the top soybean exporter, experienced heat stress primarily in the state of Goias, as well as parts of Mato Grosso, Rio Grande do Sul, Minas Gerais and Parana, while weather has been too dry in Santa Catarina, Sao Paulo and Bahia states, Oil World said. The country’s total soybean production may be 2 million to 3 million tons smaller than most analysts expected four to five weeks ago, it said. The researcher last month pegged Brazil’s crop at a record 89.5 million tons.

 

Argentina’s Crop

 

Output in Argentina, the second-biggest South American producer, may be between 53 million and 54 million tons, less than earlier estimates of 54 million to 55 million tons, according to the report. Oil World said it cut its forecast for Paraguay’s crop to 9 million tons. That compares with an estimate of 9.3 million tons in the report released Jan. 28.

South American soybean exports were "comparatively small" in January at about 551,000 tons, while shipments probably will accelerate this month, Oil World aid. Brazil may export as much as 2.7 million tons in February, compared with 1 million tons at the same time last year, while analysts are waiting to see if infrastructure bottlenecks delay some shipments, it said.

In Argentina, farmers are holding soybeans as a hedge against currency depreciation, selling only 3.1 million tons of their new crop so far, the smallest forward sales in more than 10 years, Oil World said. Farmers still haven’t sold about 8 million tons of soybeans from last year’s harvest, it said.

"The lack of significant selling pressure from Argentina and the alarming reduction of soybean stocks in the U.S. would be supportive for the global soybean and soya meal markets in the near to medium term," Oil World said, adding that it sees "considerable price pressure unfolding only once supplies start outpacing demand, allowing stocks to recover in the producing and importing countries."

 

--Editors: John Deane, Nicholas Larkin

 

To contact the reporter on this story: Whitney McFerron in London at wmcferron1@bloomberg.net

 

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

See Comments


 
Log In or Sign Up to comment

COMMENTS

No comments have been posted



Name:

Comments:

Receive the latest news, information and commentary customized for you. Sign up to receive Top Producer's eNewsletter today!

 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions