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Deteriorating Brazil soybean quality a 'big concern - and getting worse'

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Quality damage is growing as a concern for Brazil’s soybean crop, overshadowing hopes for record production, and progress some farmers are making in catching up on an unusually-slow harvest.

 

The US Department of Agriculture on Tuesday raised by 1.0m tonnes to 134.0m tonnes its forecast for Brazilian soybean output in 2020-21, saying that while persistent wetness which had slowed harvest in central states “affects yields”, the setback had been made up for by results further south.

 

“The gains in Rio Grande do Sul offset the current reductions in the Centre West states,” the USDA said, also citing a change in trend yield assumptions for its upgrade.

 

However, the upgrade contrasts with cautions of other commentators of a crop declining in both quality and quantity terms thanks to wet weather, which has further delayed a harvest already lagging thanks to late-running sowings.

 

According to AgRural, farmers had harvested 35% of their planted soybean area as of Thursday, down 14 points year on year and the slowest pace in a decade, although in Mato Grosso, the top growing state, research institute Imea did note some catch-up, after grows reaped 15.1% of their crop last week.

 

While harvest progress, at 67.2%, remains 24.3 points behind the year-ago pace, it has now “exceeded the minimum range of the last five years”.

 

‘Lowering estimates’

“Many local analysts are lowering their estimates for the 2020-21 Brazilian soybean crop,” said Dr Michael Cordonnier, the respected South America crop analyst, noting for instance ideas from the Mato Grosso branch of producers’ group Aprosoja of a weakened state yield.

 

According to consultancy Patria AgroNegocios, unharvested but mature soybeans lose 1% of weight per day during their first week of standing in wet weather, and 2% thereafter.

 

However, greater focus is now centring on the quality of the crop being harvested, and whether this will amplify the effective hit to supplies from reduced output expectations.

 

‘Quality problems increasing’

Imea said that in Mato Grosso, brazils top soybean growing state, “with the large volume of rain observed in the regions of the state… there are reports of a higher percentage of damaged grains occurring”.

 

AgRural said that “with high humidity for the past few weeks in regions of Mato Grosso and in the north and northeast of the country, quality problems have been increasing”.

 

Dr Michael Cordonnier said that “the amount of poor quality seeds resulting from the wet weather is a big concern and it appears to be getting worse.

 

“Continued wet weather in central and northern Brazil is resulting in a large amount of very poor quality soybeans.”

 

Logistical impact

Concerns are being exacerbated by the knock-on effect of greater crop drying needs in snarling up logistics.

 

“There are reports of trucks waiting as long as five days to unload their high-moisture soybeans at local grain elevators,” Dr Cordonnier said, noting the longer drying times required, and flexibility grain elevators need to blend poor quality soybeans with higher-spec ones.

 

“The longer those high-moisture soybeans set in the truck without drying, the greater the possibility of further deterioration.”

 

Imea highlighted “high humidity in the loads received from trading companies”.

 

The quality setback was likely, in statistical terms, to show up in an accelerated domestic disappearance rate for Brazilian soybeans, as more crop is needed to meet soymeal and soyoil production orders, Dr Cordonnier added.

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