In this morning's World Supply & Demand Report, USDA lowered its Brazil soybean projection by 2 MMT from last month to 72 MMT, which is down 3.5 MMT from year ago. Area is forecast at a record 25 million hectares, unchanged from last month and up 0.8 million from last year.
USDA says "Yield is forecast at 2.88 tons per hectare, down 3% from last month due to below-average rainfall in the south from November through January." On the other hand, above-average rainfall during October gave nearly ideal planting conditions for most of Brazil, USDA notes.
The planting pace was ahead of the five-year average throughout the planting season, with most of the crop planted by the end of December, USDA reports. "However," it continues "below-average rainfall in the south from November through January reduced potential yields and state crop estimating agencies for Paraná and Rio Grande do Sul reduced state production forecasts by nearly 5 million tons."
Crop losses from the drought in the south will be partially compensated by above-average yields in the states of Mato Grosso, Goáis, Minas Gerais, and the northeastern states of Maranhão, Tocantins, Piauí, and Bahia (or the MATOPIBA region), according to USDA. But it says that overall, the southern drought will reduce national output by several million tons.
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