August 24, 2011

Big corn plantings to cut Brazil's soy output

The 2012 soy crop of Brazil will be smaller than anticipated as farmers will plant more corn to cash in on high prices, Hamburg-based oilseeds analysts Oil World projected Tuesday (Aug 23).

Brazil, the world's No.2 soy producer after the US, is likely to harvest 73.3 million tonnes of soy in early 2012, Oil World estimates. This is below the 73.5 million tonnes Oil World forecast on August 2 and below Brazil's record 75.04 million tonne harvest in early 2011.

"A sizeable increase in (Brazilian) corn plantings by 4-5% will curb the expansion in soybeans for the crop to be harvested in early 2012," Oil World said.

Corn prices have risen by about 14% so far this year largely because of fears about damage to the upcoming US crop.

Brazilian farmers will plant 24.7 million hectares of soy for harvesting in early 2012, up only modestly from the 24.17 million hectares harvested in 2011, Oil World forecast. But yields are unlikely to reach last year's record levels.

Farmers in Argentina, the world's No. 3 soy producer, may plant more corn and other cereals which could also limit the expected growth in soy plantings, it said.

But Argentine soy plantings will still rise to 19.3 million hectares from 18.8 million hectares last season, it said.

Oil World said it has retained its previous forecast that Argentina will harvest 53.0 million tonnes of soy in early 2012, up from 49.2 million tonnes in early 2011.