August 2, 2011

Brazil's soy production expected to rise 0.4%

Brazil's 2011-12 soy production is expected to rise 0.4% on-year to a record 75.18 million tonnes, as a likely increase in the planted area compensates lower productivity, according to a Dow Jones report.

Exports of the oilseed are seen rising to 35.6 million tonnes, up from 34.4 million tonnes in 2010-11, on the back of strong demand from Asia, agricultural consultancy Celeres said in a weekly report. China is expected to consume 60% of Brazil's soy exports.

Celeres sees 25.01 million hectares being planted with soy in the crop year starting in August, up 3.6% from 2010-11. Productivity is expected to decline by 3.1% to 3,006 kilograms of soy per hectare, in line with past harvests.

"Given the success of production in the last two seasons, with record volumes and handsome prices, it's expected that producers will again expand the area cultivated with the oilseed," Celeres said.

The centre-western state of Mato Grosso is expected to see the biggest increase in planted area, up 250,000 hectares.

Brazil posted a record soy harvest in the 2010-11 crop year, estimated by Celeres at 74.87 million tonnes.

Stocks at the beginning of the upcoming crop year are calculated at four million tonnes, meaning that total supply of the oilseed in 2011-12 should approach 80 million tonnes, also a record, Celeres said.

The domestic soy industry's processing capacity is around 50 million tonnes, the firm added.