BRASILIA/SAO PAULO (Reuters) — Brazilian government crop supply agency Conab slashed its forecast for the 2013-14 soybean harvest by five percent to 85.44 million tonnes on Wednesday, citing climate problems in several states late in the growing period.
The new outlook probably reflects the worst of the damage, and the next official forecast should remain stable or even increase slightly, Neri Geller, director of agricultural policy at the Agriculture Ministry, said at a news conference.
Because of hot, dry weather in southeastern Brazil earlier this year, yields appear to be as much as 10 percent lower than those expected in February, Conab said in its sixth estimate for the current harvest. The dry weather also left the crop more susceptible to pests, the agency said.
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The top-producing state, Mato Grosso, has the opposite problem: Heavy rains during the harvest, which is 60 percent complete there, are hurting the quality of soybeans.
Geller said the climate had improved in Mato Grosso and in No. 3 growing state Rio Grande do Sul, where Conab slashed its yield estimate to just 2.5 tonnes per hectare there.
Conab expects average overall productivity in Brazil of 2.867 tonnes per hectare, below last year’s 2.938 tonnes.
Parts of Rio Grande do Sul are expected to get about 40 millimeters of rain this weekend, while Mato Grosso should remain dry, aiding harvesting, according to a Wednesday weather bulletin from Somar Meteorologists.
In its monthly report, Conab said 45.3 million tonnes of soybeans would be exported this crop year, down from 47.7 million tonnes expected last month.
Conab Director Rubens Rodrigues dos Santos said the decrease in exports would not be enough to affect global prices.
May soy prices on the Chicago Board of Trade fell 37 cents on Wednesday to $13.76 due to trade talk that top buyer China may cancel import orders.
Even with the reduced harvest estimate, the soy crop would surpass last season’s record 81.5 million tonnes by 4.8 percent, helped by the planting of new areas. However, Brazil is no longer likely to overtake the United States as the world’s top producer of the oilseed this year.
The U.S. Agriculture Department on Monday forecast Brazil would produce 88.5 million tonnes of soybeans, while the United States would grow 89.5 million tonnes.
Conab also reduced its estimate for Brazil’s total corn crop to 75.18 million tonnes from 75.47 million tonnes.
Even though it cut its estimate for the first of two corn crops that Brazil plants each year by about one million tonnes, Conab compensated by increasing its forecast for the second crop, which farmers have started planting in some areas.
Still, the corn forecast has room to fall further as Geller said many farmers were having trouble planting the second crop due to waterlogged soil in Mato Grosso.
Conab’s report said some producers in Mato Grosso still intended to plant a second crop of soybeans, a practice the government discourages because failure to rotate crops leaves soils prone to caterpillar infestations.
The report said Conab doubted the practice would continue in future years, but if it did, the agency would begin a forecast for a second soy crop along with the second corn crop.
Conab cut its estimate for Brazil’s now-harvested wheat crop to 5.5 million tonnes from 5.8 million tonnes.
If the figure is correct, Brazil’s wheat output would still be up by 26 percent from the previous year, reducing import needs at a time flour mills are struggling to get supplies from Argentina because of the neighboring government’s strict export controls.
Conab left its forecast for the 2013-14 cotton lint crop unchanged at 1.64 million tonnes, up from 1.3 million tonnes a year earlier.
