Brazil's 2019-20 soybean output forecast cut to 123.5 mil mt: Agroconsult

New Delhi — Brazilian soybean production in crop year 2019-20 (September-August) is forecast to reach 123.5 million mt, down 0.8 million mt from February estimate due to an extended dry weather spell in the southern regions, agricultural consultancy Agroconsult said Tuesday.

There are concerns regarding soy productivity losses in Rio Grande do Sul, Brazil's second biggest bean producing and exporting region, Agroconsult said. The state has been suffering from dry weather conditions since December, which could reduce its soybean productivity by almost 40% on the year to 12.7 million mt.

Nonetheless, the latest forecast was at an all-time high and up 7% on the year, the consultancy said. Overall soybean yield has increased across all primary oilseed producing states, such as Mato Grosso, Goiás, Parana and Sao Paulo.

According to Brazil's national crop agency Conab, the soy yield is expected to rise 5.2% on the year to 3.37 mt/hectare due to sufficient rainfall across the region since October. While planted area is estimated 2.6% higher year on year at 36.82 million ha, Conab's March report said.

Despite a delayed start in September due to dry weather, soybean planting in Brazil was completed on time as primary soy producing regions, such as Mato Grosso, received sufficient rainfall, Conab said.

According to the analysts, Brazil's total soy output in 2019-20 could be further revised down as soybean harvest continues to lag in Rio Grande do Sul, while other states have almost finished their harvesting.

Brazil's soybean harvest reached 76% of the projected area of 36.4 million ha in the 2019-20 crop year as of March 26, at par with last year's pace, agricultural consultancy AgRural said Monday. Soybean harvesting has 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, AgRural said.

Brazil -- the world's largest soybean producer and exporter -- is forecast to export 72 million mt in 2019-20, up 3% on the year, while ending stocks are forecast down 39% to 2.18 million mt, Conab said in its December report.

Road ahead

Brazil is still the primary soybean supplier to China -- the world's largest soy consumer -- accounting for 80% of its total soybean purchases, according to Chinese customs data.

However, the US-China phase one trade deal, greater domestic crushing demand, and a higher biofuel mandate may limit Brazilian export growth in the coming months, sources said.

Additionally, the coronavirus pandemic, which has so far claimed over 42,000 lives, could cause major uncertainty for Brazilian soybean farmers and traders, Conab said.

As the epidemic spreads, governments around the world have imposed severe quarantine measures on inland and marine transportation, which could affect commodities trade in the coming weeks, including soybeans, a top US trade official said.