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August 8, 2019

First Look at 2019/20 South American Crop Production

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

Now that the calendar has turned to August, it is time to take our first look at the upcoming South American growing season. Estimates made this early may change going forward due to weather, prices, trade tensions, politics, etc., so we need to take these early estimates as just a guideline.

Brazil Planting Pattern - Farmers in southern Brazil will start planting their full-season corn by the end of August if the temperatures and soil moisture permits, and they will finish generally in late November. They will start planting soybeans on September 11th in Parana and September 16th in Mato Grosso and other areas of central Brazil and they will finish planting in early December. The safrinha corn will be planted during January and February, but it might go until early March.

2019/20 Brazilian Soybean Production - I am estimating that the 2019/20 Brazilian soybean acreage will increase 2-3% to 36.7 million hectares (90.6 million acres). I am estimating the 2019/20 Brazilian soybean production at 124.0 million tons. The Brazilian soybean yields should rebound after a disappointing 2018/19 growing season and I think Brazil will have a lot of things going for it in 2019/20 given the ongoing trade dispute between China and the United States.

The additional soybean acreage will come from the clearing of new land in northeastern Brazil as well as pasture conversions to row crop production in central Brazil.

2019/20 Brazilian Corn Production - Corn was the big winner last year in Brazil and I think it will be the winner again in 2019/20. Brazilian farmers just harvested record safrinha corn yields and they are selling their corn for good prices. I feel that will encourage farmers to increase their corn acreage in 2019/20.

I am estimating that the 2019/20 Brazilian corn acreage will increase 6% to 18.3 million hectares (45.2 million acres). The corn yields in 2019/20 may not quite match the record yields of this past season, therefore, I am estimating the 2019/20 Brazilian corn production at 105.0 million tons.

Since over 70% of Brazil's corn is planted as the safrinha crop, it is relatively easy to increase the safrinha corn acreage because they do not have to take out another crop to plant more safrinha corn. A word of caution - the safrinha corn acreage is highly dependent on when the soybeans are harvested. If the Brazilian soybeans are planted relatively early, it could encourage even more of an increase in safrinha corn acreage. Conversely, if the Brazilian soybeans are planted relatively late, the safrinha corn acreage may not increase as much as expected.

Argentina Planting Pattern - The spring planting season starts later in Argentina than in Brazil. Farmers in Argentina will start planting corn sometime in September depending on the temperatures. The first phase of corn planting will be during September and October when approximately 45% of the corn will be planted. The second phase of corn planting starts in December and continues through much of January. Farmers in Argentina do not like to plant corn during November because it will then pollinate during January which can be hot and dry. Farmers in Argentina start planting soybeans in October and they finish panting about mid-January.

2019/20 Argentina Soybean Production - I think farmers in Argentina will put more emphasis on corn production than soybean production in 2019/20. That has been the trend in recent years and I think it will continue in 2019/20. Even though Argentina may start exporting a limited amount of soybean meal to China, the overall trade war between the occupant of the White House and China continues to depress soybean prices.

Corn prices are being negatively impacted by the trade dispute as well, but another important factor in Argentina is the export tax situation that favors corn over soybeans. Argentine farmers have also been trying to get a more balanced rotation by increasing their corn acreage.

Therefore, I am estimating that the 2019/20 Argentine soybean acreage will decline 1% to 17.7 million hectares (43.7 million acres) and that the 2019/20 Argentine soybean production will hold steady at 56.0 million tons.

2019/20 Argentina Corn Production - The farmers in Argentina are expected to continue putting more emphasis on their corn production at the expense of a few soybean acres. Therefore, I am estimating that the 2019/20 Argentine corn acreage will increase 4% to 6.0 million hectares (14.8 million acres) and that the 2019/20 Argentine corn production will be 51.0 million tons.