South America Calling

Predominantly good weather across Brazil's soybean belt over the past month is firming up ideas that the crop will be large, prompting analysts to reinforce or raise record forecasts.

First came the official Agriculture Ministry figure. On Dec. 10 the ministry raised its soybean forecast, from 89.3 to 91.8 million metric tons, to 95.8 mmt amid favorable reports from the fields.

This move marked the start of a tendency for forecasts to come in stable or slightly higher.

In mid-December, Agroconsult, a local farm consultancy, predicted a crop of 94.6 mmt, based on what it described as conservative yield projections. Meanwhile, following an upward revision of area in December, Franca Junior Consultoria, another local consultancy, is now predicting a crop of 96.9 mmt.

Then U.S.-based consultancy FC Stone this week raised its number slightly to 93.5 mmt as the crop has not been adversely affected by the late start to the season.

The range of forecasts remains wide considering we are nearing harvest in some regions. While 97 mmt represents the top end, Abiove, the Brazilian soy industry association, pegs output at a conservative 91 mmt.

Obviously, part of the reason for the wide range is the late planting, which means harvesting will only really get going in February.

With soil moisture levels generally good and further rain forecast, there is little reason to prompt estimates to fall at the moment.

Alastair Stewart can be reached at alastair.stewart@dtn.com

(ES)

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