October 6, 2006

Brazil's 2006/07 soy crop seen at 53.5-55 million tonnes

Brazil's soy planting intentions for the 2006/07 season declined by 7.6 percent as expected to fall between 20.5 million and 21 million hectares, the National Commodities Supply Corp (Conab) said Thursday (Oct 5).

Most of the reduction will come from the centre-west and south-east due to a combination of low local soybean prices, an unfavourable foreign exchange between the US dollar and Brazilian real, and farmer preference for more profitable crops, especially cottons and sugarcane.

On the other hand, southern farms in Parana and Rio Grande do Sul should increase planted area by one percent, Conab said, thanks to lower overhead costs and their proximity to ports.

Although most of Brazil soy growers have yet to plant, Conab put the crop between 53.5 million and 55 million tonnes. That would make the 2006/07 crop similar to the previous season, where some 53.4 million tonnes were harvested.

However, the early estimate does not account for weather problems and actual planting in Mato Grosso, the no. 1 soy producing state. Worst case estimates have put the crop closer to 51 million tonnes, according to private agribusiness consultancy Agroconsult.

Only northern Mato Grosso is currently planting soy. The rest of the country will start planting in the next ten days, weather permitting. Rain is in the forecast for most of the next 15 days, however, in Parana and Mato Grosso, according to the local Southern Marine Weather Service. Parana is the no. 2 soy producer.

Brazil is the world's no. 2 soy producer and exporter following the US.