SAO PAULO, Nov 29 (Reuters) – Brazilian analysts are likely to raise soybean output forecasts in coming weeks as weather fears have subsided and the crop is developing well, four consultancies told Reuters this week.
As seeding began about two months ago large areas were dry, but rain so far this season has been good and soil moisture has recovered.
Brazil, the world’s largest exporter of the oilseed and the No. 2 producer after the United States, is now expected to harvest 109.43 million tonnes of soy in the 2017-18 cycle, based on an average of forecasts compiled in a recent poll.
“What we know so far about the development of the crop indicates there will be a rise in the average yields,” said Adriano Gomes, an analyst at AgRural, in a telephone interview.
Consultancies tend to be cautious early in the planting season, said Luiz Fernando Roque at Safras & Mercado, explaining some factor in potential weather issues into initial projections. Roque said Brazil would “effortlessly” reach 110 million tonnes of soy production even in the advent of minor weather adversities this season.
Analysts’ remarks signal growing optimism after historically high yields and last season’s near-perfect weather, which led to conservative forecasts for fear that such conditions could hardly be repeated.
Roque’s Safra, which estimates soybean output at 114.7 million tonnes this season, roughly the same amount produced by Brazil in the last, has the highest projection in the Reuters poll.
Ana Luiza Lodi, a soy expert with INTL FCStone, does not rule out the possibility of Brazil matching last season’s output levels, and is set to revise her own forecasts this week.
Though numbers are being finalized, Lodi said yield projections could be revised upward based on how the crop is evolving and on a widely anticipated increase in soy planting area.
After farmers delayed planting in the Center-West of Brazil due to dry weather, soy and first-corn fields improved significantly, said Enilson Nogueira at Celeres. The next factor influencing estimates is related to the La Nina weather pattern, which he said could limit rains in the south of Brazil and in Argentina and potentially damage crops depending on if and when it hits.
Marco Antonio dos Santos, at weather consultancy firm Rural Clima, said La Nina, which causes periods of below-average sea surface temperatures across the east-central Equatorial Pacific, was unlikely to occur in this crop this season.