Brazil Soy Harvest Hit by Floods, Argentina Corn Forecast Cut

By Ryan Hanrahan

Reuters’ Ana Mano and Roberto Samora reported this past Friday that “the outlook for the soybean harvest in Rio Grande do Sul, which was on track to become the second largest producer in Brazil behind Mato Grosso state, is deteriorating swiftly after torrential rains flooded fields, with about a quarter of beans to be reaped.”

“The impact of the downpours, which left entire cities and farms underwater, could cause a drop in production of up to 15% in the state, Leandro da Silva, a manager at farm cooperative Cotrisal, said on Friday,” Mano and Samora reported. “He now sees output at between 19 million metric tons and 20 million metric tons.”

“‘There will be quantitative and qualitative losses,’ Silva said by telephone from Sarandi, in the northwest of the state,” according to Mano and Samora’s reporting. “‘For me, what remains to be harvested will be 30% to 40% damaged (on average). In the most affected areas, you will have 70% to 80% of beans damaged.‘”

Current State of the Flooding

Argus Media’s João Petrini, Maria Albuquerque and Nathalia Giannetti reported that, since April 29, “the highest volumes (of rain) reached the central areas of Rio Grande do Sul, with cities receiving rainfall of 150-500mm (6-20 inches), regional rural agency Emater-RS data show. The monitoring station of Restinga Seca city, in the center of the state, recorded rainfall of about 540mm(21 inches).”

As of May 5, “154 sections of 68 highways were totally or partially blocked, according to the state’s emergency service,” Petrini, Albuquerque and Giannetti reported. “…The Rio Grande port has not suspended operations, but handling is slower. Despite the heavy rainfalls, demurrage rates and waiting queues for docking and unloading were not altered.”

Mano and Samora reported that the rainfall has “destroyed logistics and power infrastructure. Some fields remain entirely underwater, according to farmers, who circulated videos showing damaged crops and submerged farm equipment.”

Overall, Bloomberg’s Maria Eloisa Capurro reports that flooding displaced “more than 88,000 people in more than 330 municipalities. At least 75 have died and 103 are missing, according to the latest official report. Several neighborhoods of Porto Alegre, the most populated city in the region, are under water while its international airport announced on Friday night it would close for an undetermined amount of time.”

Brazil Crops Outlook

Mano and Samora reported that analysts estimate that “around 5 million tons of soybeans are likely “at risk” due to rains and flooding, but suggested that final losses could be lower at around 1 million to 2 million tons. Broker Adelson Gasparin, based in Passo Fundo, initially projected potential damage to 2.8 million tons of soy, but that can change as yield loss will vary in the different affected regions.”

“‘The market will soon discover that the Brazilian harvest is far from 155 million tons’ estimated by the U.S. Department of Agriculture, according to analyst Fernando Muraro at AgRural,” Mano and Samora wrote.

Argentina Corn Forecast Cut Again

Reuters’ Maximilian Heath reported that “Argentina’s Buenos Aires grains exchange slashed its estimate for the 2023/24 corn harvest on Thursday, citing the effects of a damaging leafhopper insect plague and poor weather. The exchange cut its forecast for the corn crop to 46.5 million metric tons, down from the 49.5 million tons previously estimated, which was already down sharply from initial estimates.”