November 11, 2013

 

 

Conab, Brazil's government crop supply agency, is expecting a record 2013-14 soy crop of between 87.9 million and 90.2 million tonnes, up slightly from its October forecast as soy plantations exceeded previous estimates.

 

If confirmed, Brazil's soy crop would beat last year's 81.5 million tonnes record by as much as 11% and replace the US as the world's top producer of the oilseed.

 

Soy area in Brazil will likely expand to as much as 29.5 million hectares, up from the maximum 29.36 million hectares forecast last month when Conab projected a crop of between 87.6 million tonnes and 89.7 million tonnes.

 

January soy on the Chicago Board of Trade bid down 0.2% at US$12.64/bushel.

 

Climate in the southern producing states, where soy planting is 33% completed, was "very favourable," according to Conab's report. In the top producing centre-west region, planting is progressing well, but with irregular rain in September and October.

 

The agency highlighted several possible risks to the crop, saying seeds in Mato Grosso are of a lower quality due to rains during the harvesting of crop in January 2012.

 

Conab said that pesticide costs were rising due to a rare caterpillar known as helicoverpa which is forcing farmers to use much more pesticide than usual in all producing regions

 

Brazil's soy exports for the second year, estimated at 45.9 million tonnes, will likely surpass domestic consumption of 40.5 million tonnes.

 

The agency also estimated a 2013-14 corn crop of between 78.5 million and 79.8 million tonnes, up slightly from 78.4-79.6 million tonnes last month. Conab cut its view of the 2012-13 corn crop to 81 million tonnes from 81.3 million.

 

Corn in Brazil's far south was planted earlier than soy, specifically during August when rains were scarcer. Such a development could hurt yields, Conab said. In the Parana state, farmers reduced corn plantations by up to 22%, favouring soy. Conab said corn output from the south could be 1.4 million tonnes less than last season.

 

Brazil's corn output comes increasingly from the second of two annual crops which is planted in February after soy is harvested. Conab did not calculate the second 2013-14 crop and instead used the record 2012-13 output of 46.2 million tonnes as its estimate.

 

As farmers have little incentive to plant, the second corn crop forecast could drop significantly in coming months.

 

Conab said that due to poor corn sales, it is expected that summer planting favours cotton, beans and even soy, this season. It raised its 2013-14 wheat crop forecast slightly to 4.81 million tonnes from 4.77 million tonnes in October. Although farmers planted 15% more wheat fields this season, the crop has faced unfavourable weather.

 

Brazil will have to import 6.7 million tonnes of wheat this year, 4.4% more than the previous year, Conab said.

 

The agency held its forecast for a 1.6 million tonne cotton lint crop in 2013-14, up from 1.3 million tonnes a year earlier, as farmers favour planting the textile amid low corn prices.