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August 12, 2014

Conab Increases Corn and Decreases Soybeans in August Report

In their latest assessment of the Brazilian crops, Conab reduced the 2013/14 Brazilian soybean estimate by 0.6 million tons to 86.6 million tons while they increased the 2013/14 Brazilian corn estimate by 0.35 million tons to 78.5 million tons.

For the Brazilian soybean crop, they increased the acreage by 25,000 hectares compared to last month to 30.13 million hectares, but they lowered the nationwide yield by 0.3 bushels from 41.5 bu/ac (2,865 kg/ha) to 41.2 bu/ac (2,842 kg/ha). The lower yields came from Mato Grosso and northeastern Brazil. The total Brazilian soybean acreage is up 8.7% compared to 2012/13 while the yields are down 3.3%.

Their changes in the Brazilian corn estimate are a little more complicated. Basically they reduced all their numbers for the full-season corn crop while they increased all the numbers for the safrinha corn crop.

They reduced their estimate of the full-season corn acreage by 36,000 hectares to 6.64 million hectares The yield for the full-season corn declined from 4,793 kg/ha last month (73.8 bu/ac) to 4,770 kg/ha (73.4 bu/ac). As a result, the full-season corn estimate declined 0.32 million tons to 31.68 million tons.

In contrast, they increased the safrinha corn acreage by 60,000 hectares to 9.12 million hectares. The safrinha corn yield increased from 5,094 kg/ha last month (78.4 bu/ac) to 5,136 (79.1 bu/ac) this month. As a result, the safrinha corn estimate was increased 0.68 million tons to 46.87 million.

The safrinha corn crop has benefited from good growing conditions for the last three years in a row and the safrinha crop now accounts for approximately 60% of Brazil's total corn crop (46.87 million tons of safrinha corn vs. 31.68 million tons of full-season corn). Incredibly, the safrinha corn is now higher yielding than the full-season corn (79.1 bu/ac for safrinha compared to 73.4 bu/ac for full-season corn).

Maybe you can credit the last three years of extended rainy seasons in Mato Grosso to climate change or maybe it was just random variation, but whatever the reason the corn farmers in Mato Grosso should not get too comfortable thinking it will always be like this. Long term weather records in Mato Grosso indicate that the rainy season normally ends in late April or early May and it is not normal for the rains to continue until June. Only four years ago, the rainy season ended in March and if that were to happen again, the safrinha corn yields would suffer very significant yield losses.

The total 2013/14 Brazilian corn crop is now estimated at 78.55 million tons or 2.95 million less than 2012/13 (-3.6%).