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Brazil soy crop, and exports, to soar next season

Prospects for the Brazilian soybean harvest this season have deteriorated a touch, but the country will in next year produce the biggest crop of the oilseed ever, and lift exports nearly to 1m tonnes a week.

The US Department of Agriculture bureau in Brasilia became the latest of a series of commentators to cut estimates for the ongoing Brazilian soybean harvest, citing dryness which had afflicted at last some areas from December to February.

"Drought-reduced yields brought down the national productivity and production levels," the bureau said, citing southern states such as Mato Grosso do Sul and Paraná as particularly affected.

The crop estimate was estimated at 88.0m tonnes, 500,000 tonnes below the official USDA forecast, although still a record, and above figures from many other commentators.

Brazil's crop bureau, Conab, last week cut its forecast to 85.44m tonnes, with consultancy Celeres foreseeing an 84.94m-tonne harvest.

'Land expansion'

However, the bureau predicted a sharp rise in output next season, to 97m tonnes, a record for any soybean harvest anywhere, thanks to an increase in sowings of more than 2.3m hectares, and a boost to yields from improved seed.

"Most analysts and farm groups believe that land expansion for 2014-15 soybean planting is a certainty," as farmers plough up pasture.

Areas such as north eastern Mato Grosso, and the north east region of Mapitoba, an acronym of the first two letters of Maranhão, Piauí, Tocantins and Bahia states, look ripe for expansion in soybeans.

A harvest of this extent would come in line with the 3.55bn-bushel (96.6m-tonne) harvest that the USDA has forecast for the US this summer.

Export surge

However, the US will prove no match in soybeans exports on 2014-15, with its shipments, estimated at 1.6bn bushels (43.5m tonnes), short of the 50.0m tonnes that the bureau forecast for Brazil.

It is also far more than the 42.3m tonnes of Brazilian soybean exports for the season that the USDA forecast in its long-term Baseline estimates report, released last month.

The increase, from 46.0m tonnes expected this season, is based on expectations of "sustained prices and continued strong global demand", besides the strong harvest.

The bureau said its forecast also reflected on ideas of an extension of Brazil's soybean export season, traditionally lasting from February to June, into January and July. Indeed, exports last month set a February record of 2.8m tonnes.

The forecast is also based on an expectation of improvements to Brazil's notoriously inadequate infrastructure.

Data last week showed that 63 ships were waiting to load with soybeans or soymeal at the port of Paranagua, equivalent to a wait time of about 53 days.

Infrastructure improvements

Projects underway include the BR-163 road linking Mato Grosso, the top soybean producing state, in the west of Brazil, north to the port of Santarem, on the Amazon.

This port itself is expected to double capacity by the end of next year, allowing soybean volumes to reach 2m tonnes, up from the current 1.3m tonnes.

In north east Brazil, the port of Itaqui, the first phase of construction of a 10m-tonne grain terminal is timetabled to finish next month, handling 5m tonnes. Separately, construction has also begun on the West-East railroad, connections Mato Grosso to Atlantic ports.

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