Brazil's second and third-biggest soy states lowered their crop estimates for the 2011/2012 season on Thursday, providing more early signs of the impact of drought on the world's No. 2 soy-producing country.
Drought over the grain belts of Brazil and Argentina, the world's second- and third-largest suppliers of soy, has sent Chicago soybean and corn futures prices surging in past weeks as markets weigh its impact on global food supplies. The two countries account for about 50 percent of global soy supplies and are also major exporters of corn.
Parana, Brazil's second largest soy producer, cut its crop view to 11.67 million tonnes from the previous projection of 12.73 million due to dry weather in November and December, the state's agriculture department (Deral) said.
That marked the second downgrade of the crop by the state, which had cut its outlook from 14.1 million tonnes earlier in January. The country's third largest soy state, Rio Grande do Sul, also lowered its outlook for soy and corn due to drought. The state's agriculture department (Emater) sees its soy crop at 8 million tonnes, after shaving 750,000 tonnes off its previous estimate.
Less than a month ago, Emater expected a soy crop of 10.3 million tonnes. Parana and Rio
Grande do Sul, which make up the bulk of Brazil's southern soy belt, have been the hardest hit of grain belt states by the drought. Parana produced a record 15.4 million tonnes of soy in the previous harvest of 2010/11. Rio Grande do Sul harvested a record 11.7 million tonnes last crop. Brazil overall put out a record 75.3 million tonnes of soybeans last season and is expected to harvest 71.5 million tonnes this year, according to the government's argiculture ministry.
The two southern states started the September-December planting season with regular rainfall, but conditions deteriorated in November and December and left fields parched under the hot, subtropical sun. Parana's crop is further along in development and harvesting than in Rio Grande do Sul.
Early harvest results in important producing regions have been showing signs of the damage caused by several weeks of dry weather. Rio Grande do Sul has not yet started harvesting. Parana has had abundant rains this month that will help later-developing soy in the state. The agriculture department said only about 3 percent of the state's crop has been harvested and that recent rains have stopped the decline in the state's soy crop yields.
Independent grain analysts Celeres said on Monday that just over 14 percent of Parana's soy crop is a week or two away from harvest and in the final stages of maturation. The dry weather in November and December has caused some irreversible damage to the state's crop yields, analysts say. CORN
Parana's agriculture department also lowered its estimate of the summer corn crop to 6 million tonnes from 6.4 million. Earlier in January, the state had expected 7.4 million tonnes of corn from the summer crop.
If confirmed, the currently forecast harvest would be equal to last year's summer corn outcome. Farmers invested heavily this year in seeds and fertilizers and planted 20 percent more area to the crop, enticed by the attractive price of the grain. The department projects a record 9.6-million-tonne winter corn crop, which has started early planting as the summer crop is harvested. That would be an increase of 50 percent on last year's winter crop, which took a battering from frost.
Winter corn area is seen up 10 percent on last year at 1.89 million hectares. Parana vies annually with center-west state Mato Grosso as Brazil's biggest grain crop producer. Rio Grande do Sul's agriculture department also reduced its outlook for summer corn to 3 million tonnes from 3.3 million tonnes previously. Initially the state had hoped to harvest 5.3 million.
(Writing by Reese Ewing; Editing by Jim Marshall, Dale Hudson and Marguerita Choy)