Brazil Soy Output to Fall 4 pct This Year, Could Drop Further

(NASDAQ) – Brazil’s soybean production in the 2018/2019 crop cycle is poised to fall by 4 percent from the previous cycle, according to the average forecast of 12 analysts polled by Reuters, as dry weather reversed expectations for yet another record crop.

Brazilian farmers are expected to collect 114.6 million tonnes of the oilseeds this season, below the record amount of 119.3 million tonnes in the last crop yearand a downward revision from the previous average forecast of 117 million tonnes in a Reuters poll in January.

The forecast could be cut further depending on the development of fields sowed later in the season, said Victor Ikeda, an analyst with Rabobank, which cut its own production by 2 million tonnes to 115 million tonnes.

With good weather conditions to start the season, planted area reached a record 36 million hectares (89 million acres), but dryness and excessive heat in key planting regions from December affected development of the beans in the filling stage.

Safras & Mercados, an agribusiness consultancy, said average soy yields could drop in the southern state of Rio Grande do Sul and in Matopiba, citing weather issues.

In some areas of southern Brazil, Refinitiv Eikon’s Agriculture Weather Dashboard forecast below average rains until early March.

Brazil’s second-corn crop, which is planted after the soybeans are harvested, is expected to grow by 21 percent, to 65.3 million tonnes this season, on an expected expansion of planted area and higher yields, the poll showed.

Last year, Brazil’s second-corn output was 53.9 million tonnes due to dry weather, especially in the state of Paraná.

But this season farmers will plant 12 million hectares with second-corn, which they expect to fetch better prices in reais.

Prices are 20 percent higher this year at 41 reais ($11.07) per 60-kilo bag, according to the Cepea indicator calculated by the University of São Paulo.