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August 27, 2020

Conab Estimates an 8% Increase in 2020/21 Brazil Grain Production

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

In the 2020/21 Agriculture and Livestock Perspective released on Tuesday, Conab estimated the 2020/21 Brazilian soybean production at 133.5 million tons and the 2020/21 Brazilian corn production at 112.9 million tons. The production of 15 different grains in Brazil is expected to increase 8% in 2020/21.

The very good profit margins from last year's crop and continued good prices is the reason for Brazil's anticipated expanded grain production. Brazil's soybean acreage is expected to expand 3% to 37.86 million hectares (93.5 million acres). The expansion will come from the conversion of degraded pastures to row crop production, planting soybeans for 1-2 years between the time when sugarcane fields are replanted, switching from other crops mainly cotton to soybean production, and the clearing of new land. The 2020/21 Brazilian soybean yield is forecasted at 3,526 kg/ha (52.5 bu/ac).

The devalued Brazilian currency makes Brazilian soybeans very competitive in the international market. Conab expects Brazilian soybean exports to increase 5.8% in 2021 to 86.7 million tons with China responsible for purchasing 80% of Brazil's soybean exports.

Domestic demand for soybeans is also expected to remain strong due to the surging livestock sector and the increased use of soybean oil for biodiesel production. In March of 2021, the percentage of vegetable oil blended into diesel will increase from 12% to 13% and 80% of the vegetable oil used in biodiesel production is soybean oil.

Conab is forecasting that the 2020/21 Brazilian corn acreage will increase 7% to 19.78 million hectares (48.8 million acres) with three different crops. The full-season corn crop is expected to account for 23% of Brazil's corn production, the safrinha crop will account for 74%, and the third crop planted in northeastern Brazil will account for 3%. Conab is expecting the average corn yield to increase 3%. The total corn production is projected at 112.9 million tons. Corn exports are projected at 39 million tons which would represent an increase of 13%.

Farmers in southern Brazil have already started to plant their full-season corn and the safrinha corn will be planted next January-February-March.

Brazilian farmers are expected to increase their 2020/21 rice acreage 12%, but the rice yields are expected to be lower in 2020/21 resulting in a reduction of 4% in rice production to 11.9 million tons.

Brazil's cotton acreage is projected to decline 11% in 2020/21 with a 2% reduction in yields resulting in 12% reduction in fiber production to 2.5 million tons.