After sufficient rainfall in recent weeks, the forecast for Brazilian soybean output in its 2020-21 marketing year (February 2021-January 2022) is likely to be raised in the US Department of Agriculture's upcoming World Agricultural Supply and Demand Estimates report on Feb. 9, market sources said Feb. 4.
In its previous WASDE report on Jan. 12, the USDA projected Brazilian 2020-21 soybean output at a record high 133 million mt, with a record planted area of 38.6 million hectares. Both projections have been unchanged since September.
However, analysts expected the Brazilian soybean production forecast to rise above 133 million mt as rain in January has improved overall crop productivity prospects.
The recent downpour in some key regions due to a storm system emerging from the Atlantic Ocean has largely aided crop development for late-planted soybeans, particularly in the south-central and southern provinces, a Sao Paulo-based climatologist said.
Brazilian soybean crop quality has been better in recent weeks than the early season estimates, he said.
Any upward revision in an already all-time high Brazilian soybean forecast was expected to be bearish for the US soy price forecast for 2020-21, currently pegged at $11.15/bushel, according to the USDA.
Over the years, Brazilian soybean output forecast has had a major influence on the US soybeans prices and export prospects, since the two nations vie for demand from China -- the world's largest beans consumer.
With few changes expected in the US soybeans estimates for 2020-21 marketing year (September 2020 - August 2021), the market focus has now shifted to Brazil -- the world's largest soybeans producer and exporter.
Brazilian soybean planting for 2020-21 began at the slowest pace in a decade due to La Nina-led extremely dry weather and low soil moisture conditions in September and October. As a result, soybeans were planted with almost a month's delay across the country.
Historically, late-planted Brazilian soybeans have been extremely vulnerable to dry weather in December and January. In addition, the prospects of one of the strongest La Nina in three decades stoked crop damage fears among Brazilian farmers.
But sufficient and well distributed rains since mid-December boosted the soybean crop development as the soil moisture improved significantly, analysts said.
The favorable weather was forecast to continue into February.
Much wetter weather was expected across northern growing areas in Brazil over the week ending Feb. 7, particularly in northern Mato Grosso, Goias, Minas Gerais and Bahia, weather agency Maxar said Feb. 3. But, the heavier rainfall in these areas will stall crop maturity and harvesting of summer crops and planting of safrinha corn, it said.
The heavy rainfall has virtually crippled the pace of soybean harvest in Brazil, which has been the slowest in a decade.
Soybean farmers in the South American nation had been able to harvest only 1.9% of the projected acreage as of Jan. 28, compared with 8.9% last year, the agricultural consultancy AgRural said on Feb. 1.
Notwithstanding the harvest delay, some Brazil-based agricultural consultancies have started revising up their 2020-21 soybean output forecasts on the back of improved crop quality prospects, analysts said.
