18:46 UK, 22nd Dec 2015, by Agrimoney.com

Michael Cordonnier warned of "poor germination and low plant populations" in the dryness-hit Mato Grosso soybean crop as, with no signs of immediate rain relief for the key producing state, the influential analyst joined commentators cutting hopes for the Brazilian harvest. Dr Cordonnier cut his central forecast for the Brazilian soybean harvest, which starts next month, for a second time this month – this time by 2m tonnes to 97.0m tonnes. The downgrade reduced to 800,000 tonnes the forecast increase in Brazilian soybean output in 2015-16, and took the production figure well below estimates above 100m tonnes prevalent until the past few days.

 Analysis group Lanworth raised its estimate for the harvest by 300,000 tonnes to 103.1m tonnes as recently as December 7, while crop bureau Conab on December pegged the crop at 102.46m tonnes, at the top end of the range of 101.17m-102.83m tonnes it had previously guided to. Chicago-based consultancy AGR Brasil this week nudged its forecast higher by 100,000 tonnes to 100.5m tonnes, although adding that dry weather had scuppered hopes of a "super harvest" of 104m tonnes.

'Poor germination'

Indeed, the predominant direction of recent revisions has been downwards, thanks in the main to the dryness outlined by Dr Cordonnier for Mato Grosso, where some areas "have been more than 30 days without rain. "The hot and dry weather has resulted in poor germination and low plant populations which has forced some farmers to replant their soybeans," he said, flagging estimates that 10% of soybeans in centre of the state have been reseeded - with some resown twice. "The drought conditions have impacted the earlier planted soybeans the most," Dr Cordonnier added. "The soybeans planted in October are very short in stature with few nodes and few pods."

Downbeat forecasts

Last week, Imea, the Mato Grosso agricultural institute, cut its forecast for the state's soybean output by 1m tonnes to 28m tonnes, estimating at 43% the proportion of the crop in "bad" or "very bad" condition. The forecast reflected a yield estimate which, at 50.8 sacks per hectares, equivalent to about 44 bushels per acre, was the smallest in three years, downgraded from a previous estimate of 52.6 sacks per hectare because of the lack of rain. Meanwhile, producers' association Aprosoja has estimated that 80% of soybeans are in poor or very poor condition in the worst-hit parts of Mato Grosso, while the Faeg farm federation on Friday cut its estimate for the Goias crop by some 600,000 tonnes to 9.8m tonnes. Also on Friday, Franca Junior Consulting, run by a former senior analyst at Safras & Mercado, cut its forecast for the Brazilian crop by 3.2m tonnes to 97.9m tonnes. Aurelio Pavinato, chief executive officer at farm operator SLC Agricola, this week said that Brazil's soybean crop would "definitely" fall short of Conab's estimate of 102.46m tonnes, citing "significant" losses in Mato Grosso.

'Vital relief'

Separately on Tuesday, Chicago-based broker RJ O'Brien said that its intelligence suggested the dryness was "most severe" in north eastern Brazil, an area comprising nearly 10% of the country's soydbean area, but that "dry pockets" in Mato Grosso were "getting increasingly critical". And this when "only spotty showers" are expected for Mato Grosso over the next week. A factor likely to "up concerns over Brazilian soybean losses". However, a "substantial" rain system is expected early in January, and will "if it materialises, provide vital relief" for crops.