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Brazil Pegs Soy Crop Near 60 MMT

Brazil’s Agriculture Ministry issued its first official estimate of that country’s next soybean crop last week, pegging production at a record 59.5-60.8 million metric tons.

At 60.2 million tons (2.212 billion bushels), the midpoint of that range is 21% above last year’s Brazilian crop, but is below most private estimates out of Brazil and is 6.7% below USDA’s estimate of Brazil’s 2004-2005 crop.

Soybean plantings are expected to rise modestly by about 5% to 22-22.5 million hectares (54.4-55.6 million acres), according to the ministry’s National Commodities Supply Corp. (CONAB).

CONAB attributed the growth in plantings to the lack of a “real alternative to soybeans rather than to planting soybeans being attractive.”

CONAB pegged Brazil’s main 2004-2005 corn crop at 32.2-32.6 million metric tons (1.268-1.284 million bushels), up from 31.6 million tons last year due to improved yields. But plantings are seen falling to 9.2-9.3 million hectares (22.7-23 million acres) from last year’s 9.5 million.

Total grain and oilseed production for 2004-2005 is expected to hit 128.9-130.9 million tons, up from 119.3 million tons last year, almost exclusively because of the growth in soybean plantings.

Total crop area for 2004-2005 is pegged at 47.9-48.6 million hectares, up from 47.5 million hectares.

That modest expansion of plantings is much less than what CONAB initially predicted last summer. In July, the agency forecast a 3-million-hectare jump in crop area. Rising production costs and lower prices for soybeans, corn and cotton have discouraged farmers from expanding.

Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.