Rabobank: Soy up and corn down in Brazil

This is stated in the Brazil Agribusiness Quarterly (Q1, 2018), published by Rabobank.

More soybean exports expected

The soybean harvest has entered its final stage in Brazil and the outlook remains positive in most producing areas. Despite the La Nina, in early 2018, Rabobank expects Brazil to produce 114 million tonnes of soybeans this season, reaching the 2016/17 record. This is also due to the fact that Brazil increased the planted area, 1.1 million hectares above last year. Regarding soybean prices, Brazil has profited from the higher prices and between January and March this year, soybean prices have increased by 8.5% on average in the domestic market. Brazil will also profit from the Argentine soybean losses, which will probably increase the Brazilian exports of soybean meal to this country.

Corn volume very low

Regarding corn, Rabobank expects Brazil to produce 25 million tonnes of corn in the summer crop, which will be the lowest volume in the past 20 years. Only 5 million hectares of corn has been planted this summer. This is the lowest area since it started recording this metric in 1976. All eyes are now on the second crop of the season (also known as safrinha) in order to recompose local corn supply. A good sign is that the safrinha planting in Mato Grosso, the main corn-producing state, has been in line with the average of the past 5 years, but the planting is delayed compared to 2017. This is also the case in other important safrinha regions, such as Paraná and Goiás. Therefore, Rabobank is considering a reduction in corn yields this season in comparison to last year in Brazil; from 5.5 tonnes per hectare in 2017 to 5.2 tonnes per hectare this year.

Source: Rabobank FAR