September 18, 2007

 

Brazil's 2007/08 grain crop seen up 7.4 percent

 

 

Brazil's grain production for the 2007/08 crop is expected to rise 7.4 percent from the 2006/07 crop period, according to local consulting firm Agroconsult.

 

The forecast for the total grain harvest this year is 142 million tonnes, up from last crop season's 132.3 million tonnes. Agroconsult expects planted area to expand 4.2 percent to 48.1 million hectares.

 

The country should see a 6.5 percent increase in its soy yields this season, Agroconsult said in a press release Monday (September 17). US reduction of soy planting to make way for ethanol-producing corn has provided further market opening for the Brazilian grain.

 

The only reason this figure isn't higher is climbing demand for Brazil's corn, explained Andre Debastiani, analyst at Agroconsult.

 

US corn ethanol production has boosted demand and driven prices to a more attractive level. Also, European countries are paying a premium of more than US$60 to import Brazilian corn free from genetic modifications.

 

"The corn scenario is very positive for Brazil this year. Exports are up and internal prices are favorable for producers," said Debastiani.

 

Corn crops are expected to yield 38.3 million tonnes this season, up 4.9 percent compared to last season.

 

Brazilian wheat, in turn, is helped by several problems other countries had in their wheat crops last season.

 

"Global wheat stocks are at their lowest level in 30 years, making this one of the best years, price-wise," Debastiani said. Yields are expected to rise 72.9 percent this season, in part because of the poor results in Brazil's southern states of Rio Grande do Sul and Parana last year.

 

Debastiani explains that this crop season is one of recovery for the country, mainly in the south.

 

Farmers in Brazil's central-west region are still having significant trouble with credit and debt rollover.