January 18, 2008

Lower soy acreage prompts USDA to reduce Brazil soy estimates
 

Despite attractive price incentives, current government surveys of cropping in Brazil do not support earlier estimates that soy area expanded as much as 22 million hectares, according to USDA's Oil Crop Outlook released Monday (January 14, 2008).

The lower acreage has prompted the USDA to reduce its estimate of Brazil's 2007/08 soy area this month by 500,000 hectares to 21.5 million.

While soy area for Brazil would still be up 3.9 percent over last year, the lower estimate trims the production forecast 2.4 percent  from 62 million to 60.5 million tonnes.

The expected soy yield remains unchanged.

Currently, soil moisture is good throughout most of the country's growing region, however, regular rainfall during January and February will determine final yields.

A smaller crop outlook for Brazil curtails the 2007/08 forecast of soy exports by 1 million tonnes to 29.7 million.

A lower supply could further reduce expected ending stocks in Brazil.

The modest supply is reflected in the sharp price increases for soy now being registered in Chicago.

Depending on yield figures, Argentina may take the 1-million tonne absence from Brazil by expanding its own 2007/08 soy exports to a record high 11.2 million tonnes, the USDA said.