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February 13, 2012

Conab Lowers Brazilian Soy Estimate, Increases Corn Estimate

In their fifth monthly evaluation of the Brazilian crops, Conab lowered its estimate of the 2011/12 soybean crop to 69.23 million tons, which is 8% lower than the 75.3 million tons produced in 2010/11. The lower production is due to the dry weather that has afflicted the soybean crop in southern Brazil between November and mid-January.

The total Brazilian soybean acreage in 2011/12 set a new record at 24.76 million hectares or 2.4% more than in 2010/11. The soybean acreage increased in most of the Brazilian states with the exception of three - Parana, Santa Catarina, and Minas Gerais where the soybean acreage declined due to increased acreage of full-season corn production.

The nationwide soybean yield is now estimated at 2,795 kg/ha (40.5 bu/ac), which is 10.3% lower than the record yield obtained in 2010/11 (3,115 kg/ha or 45.1 bu/ac). As expected, the biggest declines in soybean yields are occurring in southern Brazil where the rainfall has been the least. The soybean crop in Rio Grande do Sul is still flowering and setting pods, but the statewide yields are already expected to decline 30.8% to just 1,970 kg/ha (28.5 bu/ac). The soybean crop in Parana is further advanced in its development because it was planted earlier and the yields in that state are expected to decline 21% to 2,650 kg/ha (38 bu/ac). The smallest soybean producing state in southern Brazil is Santa Catarina and the soybean crop was not quite as severely affected as in the neighboring states and as a result, the soybean yields are expected to be down 14% to 2,790 kg/ha (40.4 bu/ac).

The soybean yield in Mato Grosso is estimated at 3,190 kg/ha (46.2 bu/ac), which is unchanged from the 2010/11 growing season. Heavy rains, high temperatures, and reduced levels of sunlight during the month of January provided nearly ideal conditions for the spread of soybean rust in Mato Grosso and as a result, producers in the state have had to increase the number of fungicide application in an attempt to keep the disease under control. In Goias, soybean yields are expected to be down 1.2% due to the same reasons as in Mato Grosso.

For the Brazilian corn crop, Conab estimated the 2011/12 crop at 60.8 million tons, which is 6% larger than last year's production, but lower than initial estimates at the start of the growing season. The February estimate was slightly higher than their estimate in January.

In response to strong domestic corn prices, Brazilian farmers planted 9% more full-season corn in 2011/12 (8.63 million hectares vs. 7.91 million hectares in 2010/11). Of the major corn producing states, the full-season corn acreage increased 23% in Parana, 5% in Rio Grande do Sul, and 34% in Goias. Unfortunately, dry weather in southern Brazil during November, December and the first half of January caused severe damage to the full-season corn. Corn yields in Rio Grande do Sul are expected to decline 47% compared to last year with the corn yields in Parana down 18% and in Santa Catarina they are expected to decline 15.7%. The nationwide full-season corn yield is estimated at 4,060 kg/ha (62.5 bu/ac), which is down 10.5% from last year's yield of 4,538 kg/ha (69.9 bu/ac).

The biggest change in this month's report was in the safrinha corn acreage and production. Up until this report, Conab had been using the safrinha production figures from 2010/11, but for this report, they conducted a specific survey concerning safrinha corn production. Conab is now estimating that the safrinha corn acreage will increase 13.6% and the total production will be 25.7 million tons, or an increase of 20% compared to 2010/11. The 2011/12 safrinha corn crop in Brazil is expected to account for 43.6% of all the corn planted in Brazil and 42.4% of the total corn production.

The biggest increase in safrinha corn acreage will occur in Mato Grosso where they intend to plant 2.35 million hectares or an increase of 28.5% compared to 2010/11. safrinha corn acreage in Parana will increase 10.3% to 1.89 million hectares and in Goias it will increase 6.9% to 0.57 million hectares. The nationwide safrinha corn yield is estimated at 3,854 kg/ha (59.3 bu/ac) which is a 5.2% increase compared to last year's yield of 3,647 kg/ha (56.1 bu/ha).

The safrinha corn is currently being planted in Mato Grosso and Parana as farmers harvest their early-maturing soybeans. Early planting conditions for the safrinhaM corn in Mato Grosso are considered favorable, but low soil moisture is a concern in Parana.