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Dryness Hurting Brazil Soybean Crop

09 December 2010

BRAZIL - Dry weather in Brazil’s major soybean areas has decreased expectations for next year’s crop.

The dry conditions will likely push Chicago futures prices above two-year highs reached in November, grain market analyst Rich Feltes said in a Drover's article

The US Department of Agriculture’s Brazilian attaché lowered its forecast earlier this month for the country’s 2011 crop 1 per cent to 66.8 million metric tons, citing dry conditions stemming from a La Nina phenomenon.

Brazil is the world’s second-largest soybean producer, behind the US. Any weather-related crop shortfall in Brazil could intensify competition for US soybeans on global export markets. An extended soybean rally would also boost soybean meal prices, raising feed costs for beef and pork producers.

The attaché’s estimate for Brazil’s soybean crop, at 66.8 million metric tons, would be down 3.2 per cent from last year’s crop.

Some areas, including Rio Grande do Sul, one of Brazil’s top soybean states, received rain in late November. Still, "yields are expected to be lower than last year given La Nina weather patterns," the attaché said. La Nina "is expected to continue to bring irregular precipitation throughout the growing season and result in low national yields."

Much of Brazil’s most fertile land was planted to cotton this year rather than soybeans, the attaché said. Additionally, the soybean crop was planted later than normal, which "will limit Brazil’s role in international markets until mid-February," the attaché said.

TheCropSite News Desk

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