April 4, 2014
Brazil might produce record soy crop despite unfavourable weather
Although Brazilian agents are indicating yield losses, due to unfavourable weather conditions in main development periods of crops, the volume of soy harvested remains satisfactory and Brazil might produce a record crop, according to estimates.
The harvesting continues to step up in Brazil- roughly two thirds of the planted area has been harvested. In Santa Catarina and Rio Grande do Sul States, where the soy plantation happens later, weather conditions are favouring field activities.
In Mato Grosso, Mato Grosso do Sul and Goiás States, the harvesting is nearing the end. In São Paulo, roughly 80% of the area has been harvested and, in Minas Gerais, 85%. In Bahia, where the soyplantation also happens later, circa 20% of the area has been harvested, according to players surveyed by the Centre for Advanced Studies on Applied Economics (Cepea).
Producers in Mato Grosso indicate a yield of 53 bags per hectare, against 60 bags per hectare last year. In Goiás, players surveyed by Cepea indicate crop failure, but there are no official data yet. In the northern area of Paraná (one the most damaged area by the dry weather), agents forecast yield of only 40 bags per hectare.
In spite of this scenario, Brazilian quotes are moving down. It is worth considering that, besides the dollar devaluation, there are debts to pay, which tends to push up the need to sell. Due to the harvesting peak in Brazil and problems to store the product, there is also the need of quick flow.
The ESALQ/BM&FBovespa Index for the soy delivered at the Paranaguá port moved down 4.3% in March, closing at BRL70.50 (US$31.10) per 60-kilogramme bag on March 31.
As for the CEPEA/ESALQ Index for soy (Paraná state – reference for trades in Brazil), the decrease in the accumulated of the month is 2.82%, closing at BRL67.24 (US$29.66) per 60-kilogramme bag in the last day of March.