Scant rains and high temperatures in Brazil’s main soybean fields have dashed expectations of another record harvest in the 2018/2019 season, according to a Reuters poll of 10 analysts compiled on Wednesday.
The average estimate of 10 consultancies including Brazil’s food supply and statistics agency Conab shows the country, the world’s largest exporter of soybeans, is now expected to produce 117 million tons of oilseeds in the current cycle.
As a drought hit soy fields in large producing states, the survey marks a sharp reduction from the 120.8-million-tonne output forecast in a November poll, which would have set a new record.
“The effects of an adverse climate have yet to be fully gauged,” said Steve Cachia, a director at consultancy Cerealpar. “If rains go back to normal it is possible that losses could be contained.”
But more drought-related losses remain a possibility, according to the forecasters, as Brazil’s soy harvesting is in the early stages and rains remains irregular while temperatures are still high.
Soybean harvesting had advanced to 6.1 percent of the area at the end of last week.
The outlook offers a stark contrast from the optimism at the beginning of the season, when rains were abundant and some analysts saw the best start to the season in history.
At that point, output was expected to be much higher than the previous year after farmers expanded planted area by 1 million hectares to 36 million hectares to cater to demand from China.
Paraná’s west was the most affected area by the drought, said Aedson Pereira, an analyst at consultancy IEG FNP, referring to the dry spell in Brazil’s second-largest soybean producer.
Yields in Paraná dropped by as much as 15 percent while in Mato Grosso do Sul, another large producer, yields fell by an estimated 20 percent in some regions due to adverse climate, Pereira said.
Consultancy Datagro, the US Department of Agriculture (USDA) and the International Grains Council (IGC), which appeared in the previous survey, did not revise soybean crop forecast after the drought and were not included in the poll.
