Brazil soy planting seen limited by tight credit, weather

Brazil producers are not expected to plant significantly more area with soy in the new crop due to tight credit amid the country’s worst recession in decades and the prospect of erratic weather, analysts at INTL FCStone said recently.

Farmers are expected to plant 33.56 million hectares (82.9 million acres) with soy in 2016-17, an increase of just 315,000 hectares, or 0.9 percent, over this year’s crop, the brokerage and consultancy said at a conference in Sao Paulo.

Total soybean output should reach 101.85 million tonnes, considering recent years’ average yields, compared with drought-hit production of 95.42 million tonnes in 2015-16.

“It is a difficult crop year to project Brazil’s summer grains production,” said Natalia Orlovicin, head of market intelligence at INTL FCStone in Sao Paulo.

“The La Nina phenomenon is one of the main worries,” she said.

Meteorologists expect La Nina to start developing in October. In Brazil, the climate pattern normally brings dryer than normal weather to the center-south agricultural region.

Orlovicin said weather models suggest rains could come later than usual, possibly affecting the planting season in Brazil, but she added that she does not expect a major impact.

The brokerage estimates a larger increase in corn seeding in the summer crop after good profit margins for producers this year. Planted area should grow 7.6 percent, or 412,000 hectares.

INTL FCStone estimated Brazil’s total 2016-17 corn output at 85 million tonnes, compared with 68.5 million tonnes in 2015-16, when a dry spell hurt yields in the main, winter corn crop.