Crop Estimates from South America

Safras e Mercado 2012 crop estimates:

• Brazil bean crop estimated at 70.273 MT vs. 74.38 MT in 2011
• Argentine bean crop estimated at 49.0 MT vs. 49.2 MT in 2011
• Paraguay bean crop estimated at 7.5 MT vs. 8.373 MT in 2011
• Bolivia bean crop estimated at 2.42 MT vs. 2.336 M in 2011
• Uruguay bean crop estimated at 1.62 MT vs. 1.54 MT in 2011
• Total South American bean crop estimated at 130.813 MT vs. 135.830 MT in 2011

A hailstorm last night affected several farms in southern Brazil. In the major grapevine region of Brazil, about 80% of the crop was lost in 20 minutes of hail. Fruit farms were also affected, losing the whole production of peach and other seasonal fruits.

Rio Grande do Sul and Santa Catarina states are also the bigger tobacco producers in Brazil, and were hardly damaged. Growers from an important region had done two harvests so far, and more 4 – 5 was up to start in the next following days, but was totally damaged by the hail.

Some soybean and corn crops were also damaged in the west of Santa Catarina state, and north of RS. Those are not such expressive areas, but these regions are also suffering with drought. 

Click these links to see coverage of the storm. Link 1. Link 2. 

Here in Brazil, early rains allowed seeding to begin a little earlier than last year in most regions. Southern regions are about 70% seeding, MT and West Central states are about 90% and North and Northeastern regions between 20% and 50%. Rains still good for next following days.

Private agro agencies forecast a 75mi Mtons soybean crop in Brazil. As well, they say corn crop (1^st and 2^nd) will increase until 30%, and cotton will decrease by about 5% only. Areas coming from pasture, mainly in MT. I would bet fewer soybeans (about 72mi MT) due to increases occurring in not so noble areas.

Also possible is some 2^nd crop corn reduction, stimulated by prices falling with so much corn in the 1^st crop. Also, still have old corn stored in many regions, and soybean will come earlier, forcing corn sales due to storage limits.  

Cotton also may have a higher than 5% reduction, as last year MT –biggest cotton grower state – planted normal crop cotton instead of soybeans because of low incidence of rains in the seeding season, what is not happening this year. So they will plant late cotton (or 2^nd crop cotton) and the yield of this one is lower.

While these sad disasters in Japan is dropping down prices in CBOT with worries about the demand -  at least in short term, we see climate reducing the offer here in Brazil. Rains is putting harvesting season in serious dangerous, majorly in Mato Grosso do Sul, where some analysts is projecting a reducing in 20% to 30% of the crop. Some private Ag survey agencies are estimating a total soybean crop around 68mmt, 2,3mmt less than last official estimative. 

CONAB numbers comes just in line with USDA. Soybean productions estimative increases from 70,099 mmt to 70,300 mmt. Corn also increased from 54,500mmt to 55,020mmt.

We still see problems in the soy harvest in west region due to rains, and also in some spots in south. Although we may assume that good yields in other regions are compensating these losses. 

But about corn, scenario is undefined as important areas are seeding too late, in the other hand, internal prices are very good stimulating the offer.