Brazil's southern soybean crop seen at 8-year low, crop tour reports
PORTO ALEGRE, Brazil -- Agroconsult, a Brazilian farm business consultancy, has updated its crop projection after its traditional “Crop Rally.”
The Crop Rally is a group of several analysts who travel through the country’s top producing states to estimate the crop size. Though it does not underestimate the losses, Agroconsult projects a record soybean crop of 123.5 million metric tons on a surface of 90.9 million acres.
According to the consultancy, the Brazilian crop could have been bigger but “the rains took longer to fall in the country this year.” On the other hand, when the rains started to fall, “the crops developed in optimal conditions.” The average yield estimate is 49.9 bushels per acre.
The Rally passed through Rio Grande do Sul, the state most affected by drought this season, from March 9 to 13. According to Agroconsult, the losses in the state would mean a shrink of nearly 3.0 million metric tons in Brazil’s overall soybean production. In February, the consultancy had projected an output of 126.3 million metric tons. Rio Grande do Sul alone would produce 12.7 million metric tons of soy. The state is having the worst yields in eight years. Agroconsult puts it at 31.2 bushels per acre – 40% less than last year.
The better-than-expected yields would come from the states of Maranhao, Tocantins, Sao Paulo, Minas Gerais, and Santa Catarina. “The positive performance in those states compensated for the losses in Rio Grande do Sul,” stated Andre Debastiani, coordinator of the Crop Rally.
Due to the irregular rains and the delay of the implementation of the second corn crop, Agroconsult has reduced its output forecast. The drop is 3% compared with the previous estimate, and the output would be 74.7 million metric tons. As of the first week of April, the planting is almost concluded, and the Center-West has climate conditions considered adequate.
Porto Alegre consultancy Safras & Mercado has a similar forecast for the second corn crop, putting it at a record 73.8 million metric tons, though it was reduced from previous estimates.
No Brazilian state has put any restriction on agriculture work during this coronavirus outbreak. With its most populous state, Sao Paulo, under a “stay-at-home” law as are most states, ethanol demand has dropped over 50% in one week.
Some ethanol mills are reportedly selling their corn stocks because prices are still high. One ethanol producing mill sold nearly 10,000 tons of corn to a poultry production facility.
Brazil’s iron ore exports have been beaten by the coronavirus with less than half of the volume usually exported in the first three months of the year. But according to market analyst Carlos Cogo, Brazil’s soybean exports would be the least affected by the outbreak because the “harvest has been delayed. Brazil will also take advantage of a devalued currency and the sectors benefited would be food and beverages, shoes, furnitures and clothing,” said Cogo.
In March, Brazil exported 11.5 million metric tons of soybeans, 147,000 tons of corn, and 1.4 million metric tons of soy meal. In the coming days, 1.6 million metric tons more of soybeans would be exported.
Though all the Brazilian ports remain open, logistical problems have been reported due to the delays of truck deliveries to ports. Several truckers are afraid of being infected by the new coronavirus.
Soybean prices at the Port of Paranagua are at a record of over R$ 100 per bag of 60 kilograms and corn prices at R$ 60 per bag. One dollar is worth R$ 5.20 (04.01).
Brazil’s confirmed COVID-19 cases are 5,717 and the death toll rose to 201, according to the Ministry of Health.