October 22, 2014

Oil World has cut its estimate for Brazil’s increase in soybean output to less than 3 million tons for a harvest of 89 million tons for the 2014/15 season citing a critical lack of rainfall.  Oil World’s estimate remains above last year’s production but is well below forecasts by other industry observers.  Brazil’s official bureau, Conab estimates a soybean crop of 90.6 million tons and Lanworth forecasts a soybean crop of 98 million tons while the U.S. Department of Agriculture (USDA) predicts a Brazilian soybean harvest of 94 million tons.  Oil World’s downgrade reflects reduced estimates for both acreage sown in soybeans and for yields after Brazil has had little rainfall over the past three weeks – considered to be the prime soybean planting window for the country’s main soybean producing region of Mato Grosso.  Further planting delays are expected as ongoing dry conditions are forecast for the states of Minas Gerais, Bahia, Sao Paulo, and Parana.  The weather conditions and delays are creating a negative domino effect as they will cause increased chance of outbreaks of soybean rust and a later harvest will mean less opportunity to plant a second ‘safrinha’ crop.  Oil World has also indicated that low prices will likely cause a decrease in soybean planting in Argentina as wel, stating that sowing in that country may fall by 200,000 hectares to 19.6 million hectares for the season.

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