Brazil faces a crucial fortnight for weather for its dryness-pressed soybean fields, already seeing some "irreversible yield damage" – although with the lack of rainfall speeding early harvesting.
Soybeans in Brazil, the second-ranked producer of the oilseed after the US, have "come under increasing stress" in the past two weeks, as rains forecast for moisture-deprived crops failed to materialise, Oil World said.
The lack of water has prompted "irreversible yield damage in those fields where soybeans have been in the phase of pod-setting", the analysis group said.
"Significant crop losses have reportedly already occurred in Goias and to some extent also in parts of Minas Gerais, Bahia and Mato Grosso do Sul."
'Urgently-required rains'
If "urgently-required" rains do not arrive "in the next 1-2 weeks, losses will become much greater," Oil World said, restating an estimate that Brazil's soybean harvest could come in as low as 89m tonnes, although still with the potential for reaching 93m tonnes.
"The wide range is a reflection of the still relatively big uncertainty," the German-based group said.
It is thanks to a rise of some 1.5m-1.6m hectares in area that Brazil's soybean production will beat last year's 86.1m tonnes.
Crop downgrades
The comments come as many commentators are cutting expectations for Brazil's soybean crop, with consultancy AgRural on Monday saying it was planning to downgrade its forecast from a current 95m tonnes.
Last week, Agroconsult reduced its estimate by 900,000 tonnes to 93.9m tonnes, while Aprosoja, the soybean growers' association in Mato Grosso, Brazil's top soybean growing state, pegged the crop at 90m-91m tonnes.
The less upbeat expectations reflect dryness which, according to meteorologists at Somar, has seen parts of Mato Grosso receive less than half normal rains this month, although precipitation in more southerly parts of the country has exceeded expectations.
The lack of rain, which is affecting Brazil's hydroelectric power programme besides threatening crops, has reportedly prompted some authorities in the state of Minas Gerais to cancel carnival festivities.
"At the moment an estimated 47m people, almost one quarter of the Brazilian population, are affected by some kind of electricity or water rationing measures," Oil World said.
Early loading
The dryness has, however, allowed a speedy start to soybean harvesting, and already seen the first cargo starting to be loaded up with new-crop supplies.
An order of 61,700 tonnes of soybeans is being loaded at the port of Paranagua on to the Tian Song Feng for shipment to Thailand.
"The loading started last Friday and it is actually occurring a few days earlier than last year due to a more accelerated harvest pace especially in the state of Mato Grosso," influential crop analyst Michael Cordonnier said.
He added that "by the end of January the port is expecting 27 vessels in the line-up for 1m tonnes of grain including soybeans, corn, soybean meal, and wheat".
Order cancellation
The switch of importers' demand from the US to South American suppliers, now that harvest there is ramping up, is a key concern for Chicago investors.
The US Department of Agriculture announced on Tuesday that Chinese buyers had cancelled orders of US soybeans totalling 120,000 tonnes, although unveiling a fresh order too of 111,000 tonnes to an "unknown" importer.
Chicago soybeans for March stood 0.8% lower at $9.75 Ѕ a bushel in morning deals.
Source - http://www.agrimoney.com
