Agricultural consultancy Safras & Mercado on Friday slashed its forecast for Brazil's 2018/19 soyabean crop by 6.5 million tonnes to 115.72 million tonnes, citing a prolonged dry spell in southern parts of the country. In November, Safras had projected the crop could reach a record high 122.22 million tonnes, based on positive planting and a larger cultivated area. But a lack of rain in some parts of the country in December caused some irreversible losses to the crop, it said.

Total soya planted area reached 36.42 million hectares this year, 3.2 percent more than in the previous season. Brazilian farmers were quick to sow the new soya crop in September, taking advantage of early rains and looking to profit from continued strong demand from China. Many planted varieties with shorter cycles, to be able to harvest earlier than normal. But the long dry spell hit those varieties harder, Safras said. "Soya fields that were planted later didn't suffer that much, and there is room for them to recover," Safras said. "In any event, production yields in central Brazil area will not be in the same level seen last year."

Harvest is under way in the fields planted earlier, particularly in Paraná and Mato Grosso states. Safras also revised its projection for the cycle's corn crop, estimating an output of 93.36 million tonnes, 1.6 percent less than projected in November. Production last year was smaller, at 80 million tonnes, due to problems with the winter corn crop.

Copyright Reuters, 2019