April 9, 2020

U.S. Attaché Lowers Brazil Soy Estimate 0.5 mt to 123.0 Million Tons

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

The U.S. agricultural attaché in Brazil recently lowered their estimate of the 2019/20 Brazilian soybean crop by 0.5 million tons to 123.0 million. The reduction was the result of a severe drought in Rio Grande do Sul that has reduced soybean yields in the state by as much as 40% or more. The 2019/20 soybean production in other states of Brazil, such as Mato Grosso and Goias, ended up being very positive, but they could not completely compensate for the losses in southern Brazil.

The current estimate from the USDA is that Brazil will produce 126.0 million tons of soybeans in 2019/20, but the USDA will release their latest monthly estimate of the Brazilian soybean production on April 9th.

The attaché is estimating that Brazil will export 77 million tons of soybeans in 2020, which is up 2 million tons from their previous estimate due to the devaluation of the Brazilian currency. The Brazilian real has devalued approximately 35% since the start of 2020 making Brazilian exports very competitive in world markets.

Looking ahead to the 2020/21 Brazilian soybean crop, the attaché is estimating that Brazilian farmers will increase their soybean acreage from the current 37.0 million hectares to 38.5 million hectares (95.0 million acres) or 4%. They feel that farmers will be aggressive with their inputs pushing the nationwide soybean yield to 3,350 kg/ha (49.5 bu/ac). As a result, the 2020/21 Brazilian soybean production is estimated at 129.0 million tons. Brazilian soybean exports in 2021 are expected to be 79 million tons.

Brazil has cemented its position as the world's number one soybean producer and exporter.

Going forward, the attaché feels that Brazil will lose some Chinese soybean imports to the United States as the Chinese try to fulfill their commitment under the Phase 1 trade agreement, but that will only be a temporary obstacle for Brazilian soybean exports.