Brazil revealed the first estimates of damage to its crop
prospects from hot and dry weather, cutting forecast for corn and soybean
production, but the downgrades failed to prevent a tumble in Chicago futures.
The Conab crop bureau cut by 280,000 tonnes to 75.2m tonnes
its forecast for the domestic corn harvest this year.
And it slashed by 4.6m tonnes to 85.4m tonnes its forecast
for the country's soybean harvest, ditching hopes of overtaking the US as the
world's top producer of the oilseed.
The downgrades were blamed on the dry weather in southern
and eastern Brazil which has fuelled a rally in prices in particular of coffee
and sugar, for which Conab has yet to release updated estimates for domestic
In fact, Wednesday's revisions, while for soybeans putting
Conab amongst the most pessimistic forecasters, failed to support Chicago prices
of the oilseed, which tumbled 2.4% to $13.78 3/4 a bushel for May delivery in morning
deals on talk of Chinese cancellations of import orders.
'Scarcity of rains'
Conab cut forecasts for soybean crops in all five regions of
But the downgrade was particularly severe in the south,
where in Parana, the country's second biggest soy producing state, "practically
since the time of planting , the crop was severely affected by the lack of
rainfall and high temperatures," the bureau said.
In Rio Grande do Sul, Conab warned that "pest attacks" had
been "intensified in recent weeks by the scarcity of rains".
Further north, the crop in Goiás "was strongly influenced by
climate, with low rainfall, associated with pest and disease attacks".
However, excess rains had proven a problem in Mato Grosso do
Sul, slowing harvesting, Conab said.
Main vs safrinha
For corn, Conab raised the estimate for the second, or safrinha,
crop, which is sown after the soybean harvest, by more than 900,000 tonnes to
43.8m tonnes, citing a boost from a recovery in prices.
However, the upgrade was more than offset by a 1.2m tonnes
cut, to 31.4m tonnes, in the estimate for output from the so-called main crop
because of the dry weather.
"Many crops were penalised by the scarcity of rainfall
occurring in December, January and February," Conab said, terming this a "crucial"
period for crop development in bringing pollination and early grain growth.
While, in its commentary, Conab failed to highlight any
losses to coffee and sugar, it did cut its forecast for soybean production in
Sao Paulo, the top cane growing state, by 9%, citing "climatic adversities".
The estimate for soybean production in Minas Gerais, the top
coffee growing state, was slashed by 12% to 3.31m tonnes.