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December 15, 2016

Favorable Conditions result in Higher Soybean Estimates in Brazil

Favorable growing conditions in most of Brazil are leading to increased estimates of the 2016/17 Brazilian soybean production. The consulting agency AgRural increased their estimate of the 2016/17 Brazilian soybean production to 101.8 million tons compared to their prior estimate of 100.8 million tons. The increase was due to an increase in planted acreage and the expectation for higher soybean yields.

AgRural now estimates the 2016/17 Brazilian soybean acreage at 33.63 million hectares (83.0 million acres) compared to last month's estimate of 33.25 million hectares. The nationwide soybean yield is now estimated at 50.4 sacks/ha (43.8 bu/ac) compared to last month's estimate of 47.8 sacks/ha (41.5 bu/ac). The soybean crop in Brazil is 95% planted compared to 93% last year and 93% average.

The agency expects the soybean yields in central and northeastern Brazil to be higher than last year when hot and dry weather resulted in very disappointing yields. The soybean yields in southern Brazil are down slightly from last year, not because there are problems this year, but because last year's yields were so good. The agency cautioned that not everything is perfect in Brazil. There are still concerns about dryer than normal conditions in parts of southern Brazil and northeastern Brazil.

AgRural will release their next estimate in mid-January and it should include the first yield results from Mato Grosso.

Additionally, the Brazilian Association of Vegetable Oil Industries (Abiove) increased their 2016/17 Brazilian soybean production estimate by 0.3 million tons to 101.7 million tons. They increased their estimate of Brazil's soybean exports by 0.5 million tons to 58.0 million. Their estimate of how many soybeans will be processed in Brazil remained unchanged at 41 million tons.