Brazil's Conab raises soy crop forecast despite drought

By Ana Mano

SAO PAULO, March 13 (Reuters) - Brazilian soybean farmers are poised to reap a massive crop in the 2024/25 season despite hot and dry weather in the south of the country, according to fresh data released by the national crop agency Conab on Thursday.

The new soybean crop, which farmers are harvesting now, is expected to total 167.37 million metric tons, about 1.3 million tons more than in Conab's February forecast and an all-time record.

The highest ever soybean production was recorded in the 2022/23 season, when 155.7 million tons were collected by farmers in Brazil, the world's biggest producer and exporter of the oilseed.

Brazil competes with the United States and Argentina in global grains markets, and sells most of its soybeans to China, which processes it domestically for oil and livestock feed.

The expectation of ample soybean supplies has been pressuring soy prices in Chicago.

Conab said that after the slowest start to the harvest in history, the reduction of rainfall in February led to a significant increase in the area harvested.

The agency highlighted a 10.2% rise in soy yields nationwide and a 2.8% increase in the area cultivated with the oilseed, which this year totaled 47.45 million hectares (117.251 million acres).

For the state of Rio Grande do Sul, where hot and dry weather reduced yields and compromised output, Conab said it expects the state to produce 17 million tons of soy, 2.6 million tons less than in the previous season.

Conab's estimate for the country's southernmost state is a lot more bullish than the state's own crop agency forecast, which earlier this week pegged Rio Grande do Sul's production at 15.07 million tons citing the effects of drought.