Brazil’s soybean harvest reached 66% of the projected area of 36.4 million ha in the 2019-20 crop year (September-August) as of March 19, down 2 percentage points year on year due to delayed planting in September, agricultural consultancy AgRural said.
Soybean harvesting has almost finished in Brazil’s primary state producer -– Mato Grosso, while other major states, such as Mato Grosso do Sul, Goias, and Parana were on their final stretches, the consultancy said.
AgRural’s early March forecast for total Brazilian soy output is 124.3 million mt in the 2019-20 crop year, down 1.3 million mt on its previous estimate due to prevailing drought conditions in Rio Grande do Sul — Brazil’s second largest soy producer and exporter.
The consultancy expected further cuts in soybean production in Rio Grande do Sul, after three consecutive reductions since January, due to dry conditions.
The state received light and sparse rains last week and continued to face high temperatures — a combination that does not give respite to late planted soybean crops, which are still at pod-filling stage.
During this critical phase of crop development, sufficient rain is essential while dry weather reduces the soybean yield.
Some parts of Santa Catarina have also experienced dry weather recently, which could lead to further cuts in output estimates in coming weeks, AgRural said.
Historical weather trends suggest Brazil could continue to experience dry weather in some states in March, which could further reduce the total soybean production estimate, sources said.
The next revised Brazilian soybean output numbers will be made public in first week of April, AgRural said.
Despite the expectation of a slight decline in total soy output from previous estimates, Brazil was still forecast to produce an all-time high amount of soybean in 2019-20, which could make Brazilian beans more price competitive against US-origin in the coming weeks, market sources said.
According to S&P Global Platts, SOYBEX FOB Santos for April loading was assessed at $343.75/mt Friday, while SOYBEX FOB New Orleans was assessed at $344.47/mt.
However, both origins have experienced volatility due to the coronavirus pandemic, which has claimed over 14,000 lives globally and brought the world economy to a virtual standstill.
In the coming weeks, global soybean prices could be dictated by pandemic-led global transportation curbs, port tensions and fiscal stimulus given by different governments, market sources said.
Also, market participants were watching China’s soybean demand, forecast to recover in coming days.
After weeks of lockdown, the impact of COVID-19 on in China seemed to have decelerated as it experienced drastic reduction in new cases in recent days. Some Chinese analysts forecast the country’s economic recovery to start from late April.
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