SAO PAULO, Jan 4 (Reuters) - Brazil's 2021/22 soybean crop is estimated at 138.5 million tons, nearly 6 million tonnes less than previously projected but still a record volume, hEDGEpoint Global Markets forecast on Tuesday.
The forecast reduction is largely due to the impact of drought on crops in Parana and Rio Grande do Sul states, analysts at the commodities risk management and hedge company told Reuters.
Before the effects of the drought worsened at the end of the year, hEDGEpoint was expecting a harvest of 144.2 million tonnes, above the 142.8 million tons forecast by Brazil's government crop supply agency Conab.
"It would still be a record crop, but much smaller," said Alef Dias, grain and macroeconomics analyst at hEDGEpoint.
Brazil brought in 137.3 million tonnes in the last harvest, the current record, according to data from Conab.
Dias said there was a cut in the forecast of about 4 million tonnes for the harvest in Parana, and another 2 million tonnes in Rio Grande do Sul.
Pedro Schicchi, grain and oilseed analyst at hEDGEpoint, said some climate forecast models are pointing to above-normal rains in January in drought-affected regions in the south.
"If there is good rain in January, it could reduce the size of the decline... but, if those rains do not come, the loss could be even greater," he said.
In Schicchi's evaluation, much of the drought impact has already been priced in by the international market. Chicago soybean futures for March are trading at $13.84 a bushel, the highest since the middle of last year.
"Speculators have been increasing their long positions, which favors the view that the break is already priced in," Dias said.
(Reporting by Roberto Samora, Editing by Rosalba O'Brien)
