Rio Grande do Sul sees further losses on soy, corn

Brazil's southern state of Rio Grande do Sul has for the second time this month lowered estimates for the 2019-20 soybean and corn harvest as a drought there persists.

The soybean crop is now seen at 13.3mn t, down from 16.5mn t expected last week and a nearly 30pc plunge year on year, according to the local Technical Assistance and Rural Extension agency (Emater-RS). That output would be the lowest since 2013-14.

Oilseed plantations in the state have suffered from a lack of rainfall in February and so far in March.

Emater-RS said further losses are on the radar due to the continued drought. The National Oceanic and Atmospheric Administration forecast below-average rain in Rio Grande do Sul through the next seven days.

Despite the forecast, the state might maintain its position as the third largest Brazilian producer, behind Mato Grosso and Parana, considering the latest data released yesterday by the national agricultural statics agency (Conab).

The state's corn crop is poised to reach 4.4mn t this season, adjusted lower from the 4.7mn t forecast last week and 23pc below the actual 2018-19 crop. If actual output matches the updated forecast, it would be the lowest harvest since 2011-12.

The drop comes even amid a 2.5pc increase in acreage, which totaled around 783,000 hectares this cycle. The corn plantations were also affected by drought between December-January, during a key-phase of the crop's development.

Due to its geographical location and weather patterns, Rio Grande do Sul does not have a second-corn crop, or safrinha, as other Brazilian states do.

The forecast output would likely make the southern state lose its sixth position among the main producers to Sao Paulo this season, according to Conab data.

By José Roberto Gomes