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Brazilian Drought Hits Hard at Soybean Crop

posted on March 25, 2005

It may seem a little early, but crop progress reports are beginning to surface in parts of the South. Favorable weather has allowed fieldwork from Texas to Kansas -- states where early reports on the wheat crop are upbeat.

USDA puts its official stamp on the growing season next week with the release of its March 31st planting intentions report ... and its first official crop progress report on April 4.

The crop reports coming out of the southern hemisphere lately have been unwelcome. That's because dry weather has devastated much of Brazil's primary cash crop, soybeans.

Brazilian Drought Hits Hard at Soybean Crop Brazilian officials this week said the three-month drought in the country's southern breadbasket has destroyed an estimated 13 million tons of grain -- the worst crop loss in Brazilian history.

Worst hit by the drought is Rio Grande do Sul, Brazil's southernmost state and the country's largest producer of soybeans. Officials now predict that two-thirds of the soybean harvest -- some 6.72 million tons -- has been destroyed in Rio Grande do Sul alone.

Nationwide, the latest government projections for this year's harvest are 9 percent less than the initial predictions made in December.

Soybean futures prices, meanwhile, continued a slide that began last week. Analysts believe prices that were driven higher in early March by non-commercial, or speculative, buying have begun to return to the fundamentals. Among those factors: a still plentiful U.S. soybean supply, ocean freight rates, Chinese demand, and the progress of the harvest in northern Brazil, which at last count was 32 percent complete.

Tags: agriculture Brazil crops drought news South America water weather