SAO PAULO, Dec 20 (Reuters) – Nearly half of the soy crop in Brazil’s agricultural powerhouse state of Mato Grosso is in bad or very bad condition due to irregular rain since the start of the season, a study by Mato Grosso Institute for Agricultural Economy (IMEA) showed.
The study showed 20 percent of the planted area was in “very bad” condition, while 23 percent was in “bad” condition.
Only 32 percent of the crop is in “good” or “excellent” condition, with 25 percent in “regular” condition.
Last Monday, IMEA cut its estimate for the Mato Grosso harvest to 28 million tonnes, a reduction of 1 million tonnes compared to the previous estimate in August. The state is expected to produce about 30 percent of the country’s soy crop.
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Chicago Board of Trade soybean futures jumped on hopes for U.S. export demand on Wednesday, while corn futures rose for a third day to extend a recovery from contract lows, analysts said.
Brazil’s 2015-16 soybean crop forecast was lowered to 97.9 million tonnes from 101.1 million previously due to irregular rainfall in the leading center-west and smaller northern and northeastern grain belts, local analyst Franca Junior said on Friday.
While the news was bullish for prices, soybean prices edged lower in overnight trade Sunday-Monday.
“Concerns over Brazilian weather have supported soybean prices but the market needs more bullish news to make further gains,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.
“For price direction, we will be looking at Chinese demand in early 2016, how strong is demand going to be for the Chinese New Year? We see support at $8.80 and upside will be capped at $9 a bushel.”
Persistent demand for U.S. soybean exports have underpinned the market, although traders will continue to monitor crop movement in Argentina in the coming weeks as farmers are expected to liquidate stored grain and soybeans after the country’s peso devaluation.
