Farmers in Brazil seem to be worried now as the chances of soybean crop loss threat has increased of late. Occurrence of torrential rains in recent weeks has enhanced the chances of lower harvests of this nation. The Tapurah region leads in soybean production in the state of Mato Grosso, - it is among the top 5 producing state of Brazil. The situation is the most severe in the Tapurah region where most farmers have harvested more than 80-85 percent of the crop.
But for the past week these farmers are unable to finish their harvests, since they are unable to enter the water soaked fields of soybean. The weather has also affected the crop planted in the states of Goias, Tocantins, Para and Maranhao, with cloudy conditions, enhancing the risk of lower weight of the individual plants.
The state of Mato Grosso contributes nearly 25 percent of the South American nation’s soybean production. Heavy rain and winds have resulted in pushing the plants towards the ground level and as most of the farmers were unable to harvest these plants, the beans have started decaying in some fields. Reports convey that nearly 50 percent of the soybean crops have attained the maturity or ready for harvest stage, but recent rains have forced the farmers in refraining from cutting the crop. Brazil’s annual soybean output is currently expected between 130 million and 131 million metric tons, down from an earlier estimate of 134 million. If rains continue for few more weeks, there can be further cut in the soybean crop size estimates.
According to consulting firm Ag Rural, not more than 25 percent of Brazil’s crop had been collected till end of February 2021, and this is lowest level reported in a decade. All In all, world soybean prices in near term shall also be governed from reports in context to the soybean crop size of Brazil. Any potential loss in Brazil could extend the upward price rally, seen in world markets since November 2020. Soybean futures in Chicago have already appreciated by 54-55% in the past year.
As compared with the previous financial year, NCDEX soybean futures have shown a decent price appreciation of 58 percent approximately. The excessive rainfall may also result in further delaying of Brazil’s soybean shipments, eventually prompting importers to shift some of their purchase towards the U.S., another global leader of soybean production.
