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February 13, 2014

Conab Trims Brazilian Soybean Estimate

In their latest assessment of the 2013/14 Brazilian soybean crop, Conab reduced the Brazilian soybean estimate slightly from 90.3 million tons to 90.0 million tons. The slight reduction was the result of hot and dry weather that has reduced yield prospects in eastern and southern Brazil.

In the leading soybean producing state of Mato Grosso, they increased the production from 26.0 million tons to 26.2 million tons, which represents an increase of 11.5% compared to last year. The soybean acreage in the state increased 8% from 7.9 million hectares (19.5 million acres) in 2012/13 to 8.4 million hectares (20.7 million acres) in 2013/14.

Much of the increased soybean acreage came from the conversion of pastures to row crop production. Due to the high acidity of the soil in Mato Grosso (low pH), many farmers plant dryland rice for the first few years after they plow up the pastures because rice is more tolerant to acid soils. After a few years of fertilizer and agricultural limestone applications the pH of the soil is improved enough so that they can then plant soybeans and even a second crop of corn.

Nationwide, the soybean crop in Brazil is approximately 11-13% harvested with the harvest in Mato Grosso approximately 22% complete.

Corn production in Brazil is expected to decline due to lower full-season corn acreage as well as lower safrinha corn acreage. Conab now estimates the 2013/14 Brazilian corn production at 75.4 million tons compared to 81.0 million tons produced last growing season.

Mato Grosso continues to be the leading corn producing state in Brazil, but corn production in the state is expected to decline due to reduced safrinha corn acreage. Conab is estimating that the safrinha corn acreage in Mato Grosso will decline from 3.4 million hectares to 3.2 million hectares and the total production is expected to decline from 19.3 million tons to 16.5 million tons.

As of the end of last week, approximately 16% of the safrinha corn in Mato Grosso had been plated compared to 20% last year at this time. The most advanced corn planting is in the western part of the state where 27% has been planted and the slowest is in the northern part of the state where just 3% has been planted.

Farmers are anxious to plant their safrinha corn during the ideal planting window which closes at the end of February, but they can't plant corn until after the soybeans are harvested. Recent heavy rains in central and northern Mato Grosso are slowing the soybean harvest pace.