Agroconsult was the latest consultancy in Brazil to update its soybean production projection to 114.1 million metric tons. The surface planted was increased to 86.4 million acres in a scenario where the yields fell 3.5% compared to the previous season.
“The surface increase of soybeans will occur mostly over soybean crops due to the expressive reduction of the profitability of the grain. Secondarily, we will have yet the contribution of pasture areas for this growth”, explains André Pessoa, associate director at Agroconsult.
The first consultancy in Brazil to estimate a production above 114 million metric tons was Porto Alegre-based Safras & Mercado in December. Back then, their projection was already 114.6 million metric tons.
Consultancy INTL FCStone revised its estimate for the Brazilian soybean crop from 107.6 million metric tons to 110.1 million metric tons. The adjustment came because of higher yields, but the area planted has not suffered alterations.
According to INTL FCStone, even with delays on planting, due to the slow normalization of rains, currently the crop conditions are very favorable and the climate has contributed for a positive perspective. Therefore, the average productivity expected was 3.15 tons per hectare.
“Anyways, the climate keeps following the crops passing through grain filling. In the states where planting takes place later, the climate in February is also determining”, affirms the consultancy.
For corn, INTL FCStone did not bring changes in comparison to the December numbers. The estimated output is 23.4 million metric tons, a fall of 23% compared to the previous cycle. Overall, the climate is favorable, but in the state of Rio Grande do Sul, where the conditions are drier, there is worry about the impact on some fields. “Anyways, the yield project is already lower for that state”, says the consultancy.
It is still early to talk about the second corn crop, but INTL FCStone reduced the projection to 63.2 million metric tons because of a lower surface in the state of Paraná.
The Mato Grosso Institute of Agricultural Economics (Imea) revealed this week that soybean sales advanced 5.8 percentage points to 38.6% of the total production estimated.
Though there were these recent strong commercial movement in the Brazilian state, the prices are below what they paid last year and sales are also slower than the previous season.
Brazil’s National Supply Company (Conab) released this morning (12.12) a new report that foresees an overall drop of the country’s grain production of 4.7% compared to the previous season. The total grain production in the country is expected to fall to 237.7 million metric tons.
Considering soybeans alone, the output would fall from 114.1 million metric tons from the previous season to 109.2 million metric tons. In the meantime, total corn production is estimated at 92.2 million metric tons – five million metric tons less. The output harvested in the summer would be 25 million metric tons and the second crop would be about the same of last yera – around 67 million metric tons.
For Conab, the Brazilian soybean surface is expected to increase by 3.1% to 86.4 million acres, but the production would be lower because of lower yields. The corn area would drop 9.6%, which is a reduction of 1.3 million acres.
Raw cotton production is expected to reach 1.7 million metric tons this year, jumping 10.5% compared to the previous season. The rice output is expected to reduce by 5.8% to 11.6 million metric tons.
The Monetary Policy Committee of the Brazilian Central Bank had its monthly meeting yesterday and decided to cut interest rates by 0.5 percentage points. The reference rates are now 7% a year and the lowest level in history.
The reduction was the tenth consecutive in the year, after a drastic reduction of inflation. Inflation target was 4% a year, but now the inflation rate is nearly 2.7%. Most analysts already expected the interest rates cut.
The third quarter was not good for Brazilian agriculture, but the accumulated activity shows a growth in 2016. That is what official data revealed yesterday (12.04).
The Brazilian National Institute of Geography and Statistics (IBGE) data says that from July to September there was a 3% retraction of Brazilian agricultural gross domestic product compared to the previous three months. However, if the values are compared to the third quarter of 2016, there was a growth of 9.1%. The Brazilian farm GDP accounted R$ 70.3 billion in the period.
The accumulated value of Brazilian farm products in the first nine months of 2017 was 14.6% higher than the same period of the previous year.
International consultancy INTL FCStone released a new projection for the Brazilian grain and oilseeds crop. In the December edition, the consultancy increased the estimate of Brazilian soybean production to 107.6 million metric tons – down from 106.1 million metric tons a month before.
“Planting is about to be finished, but the yield estimates are better than expected with favorable conditions”, said analyst Ana Luiz Lodi.
For summer crop corn, the consultancy estimates a Brazilian production of 23.4 million metric tons because of a smaller planted surface. Corn yields are expected to be also lower. “The shrink will be very significant”, concludes Lodi.
For the second corn crop, an output of 63.5 million metric tons is projected, which would be a fall of 5.8% compared to last year. The window for planting is tight and there is greater climate risk.
The Focus report, published by Brazil’s Central and that gathers estimates from private financial institutions, forecasts that interest rates would be cut in the country twice in a short period of time. The first cut would happen this Wednesday and the rate would 0.5 percentage point to 7%. The second cut would happen just in February of 2018, but the rate would only be cut by 0.25 percentage point.
The new is relevant for the grain market because it affects the competitiveness of Brazil’s Real and the growth of the Brazilian economy, that would be boosted in 2018. Inflation expected for 2017 is 3.06%, while the inflation target was 4.5%.
In an interview with Brazilian portal Notícias Agrícolas, market analyst Matheus Gomes Pereira from AgResource Mercosul said that the forecast for the coming five days in both Brazil and Argentina crops. But after these five days, he highlighted that Argentina will have a scarcity of rains and central parts of Brazil would have favorable weather. In some cases, there are worries about excessive rain.
“A higher probability of La Niña is more imminent to start in December and would extend until February. The worries are not concrete yet because is all about a forecast still”, said Pereira in the interview.
Data released by the Rural Institute of Rio Grande do Sul (Emater/RS) reveals that the planting works in the state of Rio Grande do Sul, the southernmost state of Brazil, reached 98% of the surface in the case of corn and 70% in the case of soybeans. In the cases of corn for human consumption, the sales for the final consumer already started in the state.
The pace of the works was pushed by favorable conditions with rains every week and sunny days. So far, the incidence of diseases is low.