Brazil's 2021-22 soybean output forecast dips further on drought: Conab

Brazil's soybean output forecast for the 2021-22 marketing year (January-December) has been cut again to 122.77 million mt, down almost 3 million mt from previous estimates, the country's national agricultural agency Conab said March 10.

The cut comes amid a severe La Niña-induced drought in the southern states of Parana, Rio Grande do Sul, and neighboring regions, which is likely to further stoke supply concerns and support prices.

Although the 2021-22 soybean acreage has increased 3.8% year on year at 40.7 million hectares, the projected output remains down 11% year on year on lower productivity of 3,525 kg/ha, down 14.4% on the year, the report said.

Conab's forecast cuts came on the back of a series of revised projections by some agricultural consultancies.

Since early January, local agricultural consultancies have already made frequent and sizable cuts in their 2021-22 forecast for Brazil amid prolonged drought in the country's south.

Curitiba-based AgRural expects Brazilian soybean output in 2021-22 at 122.8 million mt, down 23 million mt on November estimates, while Porto Alegre-based Safras & Mercado has reduced its expectation by 19 million mt to 125 million mt.

According to some analysts, Brazilian soybean production could fall as low as 120 million mt, a long way down from early-season estimates of as high as 150 million mt.

Pátria AgroNegócios, a Goiânia-based agricultural consultancy, forecasts Brazilian soybean output at 122 million mt, down from 136 million mt earlier, as the southern states of the country remain parched with a drought-inducing La Niña weather pattern holding ground since November.

In the South and Mato Grosso do Sul, yields are 43% and 28% lower, respectively, than the previous year, Conab said. The rains that occurred in February failed to reverse previous water deficits, it said.

In sharp contrast, Mato Grosso, Goiás, São Paulo, Maranhão, Piauí and Tocantins, have yields above those obtained in the 2021-21 harvest, Conab said. Bahia and Minas Gerais, on the other hand, had problems with excessive rainfall that caused a higher incidence of foliar diseases, causing a small productivity reduction, it said.

Barring the southern states of Brazil, which are reeling under drought, the rest of the country seems to be on course for a sizable soybean harvest in 2021-22.

Brazil's top soybean-producing state of Mato Grosso, located in the Center-South region of the country, is likely to produce a record crop of 38 million mt, the state's agricultural agency IMEA said.

Soy exports from Brazil in MY 2021-22 were left unchanged on previous estimates at 80.16 million mt, which is 6 million mt lower on the year on output reduction, Conab said.

The total crush for MY 2021-22 was forecast at 42.9 million mt, down 5 million mt on February estimates and 4 million mt lower than last year, the report said.

Conab defines the Brazilian soybean marketing year 2021-22 as January-December 2022.

Brazil is the leading producer and exporter of soybeans, accounting for more than one-third of the world's soybean production.