According to market sources, as of 16th February, 25% of the Brazilian soybean crop had been harvested, representing an increase of 8% from the previous week, but lower than the level reached at the same time last year, at 33%. Excessive rainfall in the central region and north of Rio Grande do Sul has limited harvest potential, with Mintec sources stating that while the crop is still expected to be at a record high, it could fall short of the initial estimates of 153 million metric tonnes. In addition to expectations of a reduction in output this season, bean quality has concerned some market sources, who state that the cases of soy rust have increased, leading to more pesticide usage by farmers in crops, which could cause higher input costs translate into higher farmgate prices. Also, export shipments are being negatively impacted by the heavy rainfall. Landslides and surface flooding caused by the rainfall have resulted in partial closures of multiple roadways and highways. The domestic bottlenecks are already causing freight delays and cancellations, thus currently limiting exportable supply. While this would put pressure on domestic prices, sustained delays to harvesting and delivery delays could mean that buyers will be dependent on US supply in the interim, as persistent drought in the other South American major producer, Argentina, continues to plague the crop.
