Sales of freshly harvested soyabeans in Brazil have slowed in the past days, while farmers to try to gauge how much inclement weather since the start of the year has damaged output. Betting that already lofty prices will rise further, local soya farmers are holding onto more of their crop, now in the midst of harvest, experts and traders told Reuters.
A drought in the southern and south-eastern parts of Brazil, and excessive rains in Mato Grosso, Brazil's biggest soya- producing state and responsible for almost a third of national output, have prompted forecasters to scale back projections for the 2013/14 harvest. Before the recent stretch of unfavourable weather, most estimates pegged Brazil's soyabean crop at a record of more than 90 million tonnes. Now various Brazilian and international consulting firms expect a smaller crop of around 87-88 million tonnes.
"Farmers in Mato Grosso are really worried they won't be able to harvest everything they planned to. The roads are terrible, storage facilities are packed, and there is a lot of soya" that needs to be siloed, said J. Birkhan, director of Mato Grosso-based consultancy and brokerage firm SimConsult. Brazilian farmers generally close delivery deals in advance with trading houses and co-operatives for a percentage of the expected production before harvesting has started and leave the remainder to be sold when prices are attractive or they need to generate cash for bills.
With harvesting almost halfway through, farmer sales account for 50 percent of this season's expected output, far below the 61 percent of sales of the 2012/13 crop seen at the end of February 2013, local consultancy Celeres said. In the last 20 days, sales advanced 2 percentage points, whereas in the 30 days before they had increased by more than 6 percentage points, Celeres data showed.
Even though the pace of sales has slowed, it's still not too far from a five-year average, Celeres added. Nor is anyone expecting a short-term shortage of soyabeans. However, if the latest forecasts for a smaller Brazilian crop prove true, Brazil will miss the chance to surpass the United States as the world's leading soyabean producer. The United States harvested 89.5 million tonnes in 2013/14, according to the US Department of Agriculture.
