The return of rains across Mato Grosso and the eastern Cerrado prompted Agroconsult, a leading local farm consultancy, to raise its Brazilian soybean crop forecast in January.
The decision to bump its figure slightly from 99.0 million metric tons (mmt) to 99.2 mmt runs against the trend for analysts to lower their forecasts in recent weeks amid concerns about the impact of previously dry weather in the Cerrado, particularly in Mato Grosso.
Agroconsult pegs production 2% higher than the 97.2 mmt registered last year.
Area is pegged at 81.2 million acres, up 3% from the year before. The consultancy lowered its area forecast by 500,000 acres in December because of the late arrival of rains in the Mato Grosso and the eastern Cerrado, which caused some farmers to abort planting this year.
However, the situation remains far from clear as the impact of drought has not been homogenous in Mato Grosso and delays in planting mean the crop isn't as far along as usual, Andre Pessoa, an Agroconsult director, told journalists in Sao Paulo.
Pessoa was speaking at the launch of the Rally da Safra crop tour. He noted that it was more important than ever to see exactly what was happening in the fields.
"The current situation makes the rally more relevant than ever," he said.
Brazil will produce a record harvest in 2015-16, despite a problematic season.
The lack of rain during November and December in the massive producing regions of the center-northern Mato Grosso has affected early cycle yields.
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There are also question marks over the west of the state as delays led to late planting. Those regions will need rains to continue into late March and April to produce well.
In compensation, big producing regions in the south, across Rio Grande do Sul and Parana, promise excellent crops, although there is concern over the hot, dry conditions that have installed over parts of Rio Grande do Sul, the southernmost state, over the last 15 days, Pessoa said.
Major delays in planting across Matopiba, the frontier soy region in the eastern Cerrado, has added another risk to the crop. Rain has returned to Bahia, Piaui and the other states since December and the crops in these regions look good. But the 15- to 30-day delay in planting means farmers there will need rains to continue into April, which can be drier in the region.
Dry weather in the Cerrado has reduced the pressure of Asian rust. However, the longer-than-usual season in the region means that pressure could grow later in the season.
Meanwhile, insect pressure has not been as strong as in previous years, with caterpillar populations significantly lower.
Pessoa said the introduction of Monsanto's insect-resistant Intact RR2 Pro seeds, which covered around 40% of area in 2015-16, was likely a factor, as was the wet weather in the south.
Farmers has saved 1 to 1.5 applications of insecticide up until now, but the longer harvest may mean they end up using the same amount as last year, Pessoa noted.
CORN OUTPUT HIGHER, SHORTAGES A PROSPECT
Agroconsult forecasts Brazil will produce 85.6 mmt of corn in 2015-16, up slightly from 84.7 mmt last year, based principally on a 6% increase in second-crop production to 57.7 mmt.
Delays in the soybean harvest will reduce the second-crop planting window, but farmers will likely plant late anyway because prices are currently attractive due to the devaluation of the real.
"Farmers will end up taking the risk," said Pessoa.
But even if Brazil manages to produce 85-86 mmt, there is a possibility of shortages in Brazil at the end of the year due to the strength of export demand.
"We could end up seeing washouts or imports in the second half," he said.
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