The word in Ponta Grossa, Parana, Brazil, is that drought has reduced soybean production by about 5 million tons more than what USDA projected in its March 10 world agricultural supply and demand estimates, according to a director of a large cooperative in the country.
Dusi Demostenes, secretary director of Coopagricola in Ponta Grossa, said at a media tour March 10, that about 2 percent of the soybean crop in southern Brazil has been harvested, but growers are not selling their beans. â€śThey believe the price is going up.â€ť
He said USDAâ€™s estimate of a 59 million-ton Brazilian crop is about 5 million tons (150 million bushels) higher than what will eventually be harvested. Dry weather has taken a toll on the crop, more so than Asian soybean rust, which thrives in moist conditions. In addition, monitoring and spraying programs have kept the disease in check this season.
In February, USDA estimated the Brazilian crop at 63 million tons, meaning actual production may have dropped about 270 million bushels.
USDA also reduced estimated global soybean production by 4.5 million tons to 224.1 million tons. Despite the reduction, production is up 19 percent from 2003-04. Brazilâ€™s crop is projected at 59 million tons, down 4 million tons from last monthâ€™s estimate because of dry weather through early March in southern states, particularly Rio Grande do Sul, Parana, and Mato Grosso do Sul.
USDA also increased U.S. soybean exports for 2004-05 by 35 million bushels to 1.05 billion bushels, reflecting record shipments to China and reduced competitor supplies, especially in Brazil.
U.S. ending soybean stocks for 2004-05 are projected at 410 million bushels, down 30 million bushels from last monthâ€™s estimate, but still the highest since 1986-87. Projected soybean oil stocks were reduced due to lower production and increased exports.
The U.S. season-average soybean price range for 2004-05 is projected at $5.05 to $5.45 per bushel, compared with $4.80 to $5.40 per bushel estimated last month.
USDA projected an increase of 45 million bushels from last month in 2004-05 U.S. ending corn stocks due to smaller exports. Exports are projected 50 million bushels lower due to increased competition from Argentina and South Africa and smaller global imports
Despite the increase in stocks, the projected price range of corn was raised 10 cents on both ends to $1.95 to $2.15 per bushel.
USDA raised U.S. cotton exports for 2004-05 by 200,000 bales to 13.2 million based on strong sales to date. Accordingly, ending stocks were reduced to 7.1 million bales, the equivalent of just over 36 percent of total disappearance.
USDA raised estimated global cotton production by 1 million bales, due mainly to increases for Brazil and India. Estimated world consumption was raised about 350,000 bales, as increases for India, Turkey, and several other countries more than offset a reduction for Thailand.
World ending stocks were raised nearly 2 percent from last monthâ€™s estimate, with Brazil and India accounting for most of the increase.
No changes were made to U.S. supply and use projections from a month ago for rice. However, global production, exports, and ending stocks for 2004-05 were lowered from last month while consumption was increased. Global production was lowered slightly due to smaller crops projected for Thailand and Australia.
World rice exports were lowered slightly due to tighter supplies for Australia. Global 2004-05 ending stocks were projected at 75.3 million tons, down 1.5 million tons from last month, 10.8 million tons below 2003-04, and the lowest stocks since 1983-84.
Projected U.S. 2004-05 ending stocks of wheat are down 5 million bushels from last month due to a 25 million-bushel increase in exports mostly offset by a 20 million-bushel decrease in food use.
Exports were raised due to stronger-than-expected sales to date and lower projected exports from Canada and the EU-25. The projected price range is $3.35 to $3.45 per bushel, up 5 cents on the lower end.
Global wheat production was raised 1.6 million tons to a record 624 million tons. Larger crops are projected for China (up 1 million tons) and Mexico (up 400,000 tons) with smaller increases for several other countries. Global consumption was raised fractionally from last month due to higher feed use.