Brazil restated its claim to top rank in world soybean
production, downplaying the impact of hot and dry weather, and maintained an
upbeat stance on corn output too, despite foreseeing a drop in safrinha
Although Conab, Brazil's official crop bureau, trimmed its
forecast for the domestic soybean crop by 320,000 tonnes to 90.0m tonnes, that
was still enough to promote the country
to top producer of the oilseed.
"This season, Brazil should become the largest producer,
surpassing the US," Conab said,
The US Department of Agriculture, which on Monday also pegged
Brazil's soybean crop at 90.0m tonnes, estimates the US harvest for 2013-14 at
Conab's forecast came despite the concerns over hot and dry
weather in some central area – notably the key cane producing state of Sao
Paulo and the coffee belt heartland of Minas Gerais – which have sent prices of
sugar and arabica beans higher.
"So far as I would say, the climate question has been
innocuous to the numbers presented," said Rubens Rodrigues dos Santo, the Conab
In fact, the bureau did make cut its forecast for soybean
output in Sao Paulo and Minas Gerais thanks to lower yield hopes, but by a modest
200,000 tonnes to a combined 5.85m tonnes.
In Minas Gerais, "crops appear to be developing well, with the
first crops showing good yields and good quality product, but only with the
advancement of harvest will be possible to assess whether there will be any
impact arising from January's drought", Conab said.
Soybeans vs cotton
The bureau made a larger downgrade to its forecast for domestic
corn production, by 3.5m tonnes to 75.47m tonnes.
However, this reflected expectations of a dent from low
grain prices, rather than poor weather, to sowings of second-crop, or safrinha,
corn, which in some areas is planted as a follow-on from the soybeans currently
In Mato Grosso, the top safrinha corn state, plantings will
fall 5.8% to 3.16m hectares, thanks to fears for the impact on profitability of
the "high fees" paid for transport crop from farms to port through Brazil's overstretched
rail and road infrastructure.
Furthermore, cotton has become a "strong competitor", thanks
to resilient prices, which in New York's Ice futures market on Monday set a
six-month high of 88.84 cents a pound.
Range of estimates
The safrinha crop overall was pegged at 42.8m tonnes - well
below the 46.2m tonnes which had been pencilled in, although this figure reflected
Conab methodology of repeating the previous year's harvest result in initial
The overall Brazil corn harvest estimate of 75.47m tonnes
remains above that of many other commentators, including the USDA, which on
Monday pegged the crop at 70.0m tonnes.
Broker FCStone last week estimated the harvest at 72.2m
tonnes, but Celeres on Monday revealed an estimate of 79.5m tonnes.