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April 16, 2020

Aprosoja Lowers 2019/20 Brazil Soybean Production to 120.0 mt

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

In their latest monthly assessment of the 2019/20 Brazilian soybean crop released on Tuesday, the Soybean & Corn Producers Association of Brazil (Aprosoja) lowered their estimate of the 2019/20 Brazilian crop by 0.6 million tons to 120.0 million tons. Technicians from Aprosoja gathered data for the report from soybean producers in 16 Brazilian states.

The state of Mato Grosso is the leading producing state with an estimated 34.0 million tons of production followed by Parana with 20.7 million and Rio Grande do Sul with 10.4 million. At the start of the growing season, it was estimated that Rio Grande do Sul would produce 19.5 million tons of soybeans, but the state suffered a severe drought reducing soybean yields by 45% or more. The central and southern part of the state was especially hit hard by the dry weather.

A devalued Brazilian currency has made Brazilian soybeans very competitive in the world market resulting in record amounts of soybean exports. In March of this year, Brazil exported a record 13.3 million tons of soybeans surpassing the previous record of 12.3 million tons set in March of 2018. For the month of April, there is speculation that Brazil could set a new monthly record by exporting 14.5 million tons of soybeans.

The vast majority of Brazil's soybean exports are destined for China. China purchased 60 million tons of Brazilian soybeans in 2019 compared to 66 million tons in 2018 and they are expected to purchase 60 to 66 million tons in 2020.

China's total soybean imports in 2019 was 82 million tons and they should import 85 to 90 million tons of soybeans in 2020. China's hog herd was severely impacted by African swine fever in 2019, but hog numbers are slowly increasing which will result in increased soybean imports. Additionally, under the Phase 1 trade agreement between China and the United States, China is expected to increase their purchases of U.S. soybeans starting in the second half of 2020. Until then, they will concentrate on purchasing soybeans from Brazil.

The Brazilian Association of Vegetable Oil Industries (Abiove) estimates that 50% of Brazil's soybeans will be exported and that 25% of the soybean meal exported in the world will be produced in Brazil.