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January 11, 2012

Conab Releases Latest Brazilian Crop Estimates

Conab released their January crop estimates yesterday and for the Brazilian corn crop, they lowered the estimate from 60.3 million tons to 59.2 million tons. They estimated that the 2011/12 full-season corn acreage in Brazil increased 9.1% to 8.6 million hectares. The yields for the full-season corn is estimated at 4,392 kg/ha (67.6 bu/ac), which is 3.2% less than last year. The yield they are using for the full-season corn is actually the five-year average yield. They commented that the full effect of the dry weather in southern Brazil has not been taken into account in this yield estimate.

For the safrinha corn crop, which will be planted in January and February, they think that the acreage will be higher than last year, but they said it was still too early to conduct a planting survey. Therefore, they continued to use the same planted area from the 2010/11 growing season for the 2011/12 safrinha crop acreage. The average yield for the safrinha crop is estimated at 3,595 kg/ha (55.3 bu/ac), which is also the five-year average yield.

Going forward, it seems likely that the full-season corn yield will decline in future reports because of the adverse weather impacting the crop in southern Brazil. Conversely, it also seems likely that the safrinha corn acreage will be higher in future reports due to the strong domestic corn prices. Will these two changes offset each other in the future? It is hard to say and the eventual answer will depend on the weather during the remainder of the growing season in southern Brazil and the weather during pollination and grain filling period for the safrinha corn crop.

For the Brazilian soybean crop, Conab is estimating that the 2011/12 soybean production will be 71.7 million tons, which is a slight increase from their December estimate. If realized, the 2011/12 soybean production would be 3.57 million tons less than last year or a reduction of 4.7%. Since all the soybeans are planted in Brazil, except for the state of Roraima in far northern Brazil, they estimated that the 2011/12 soybean acreage will be 24.6 million hectares or 453,700 hectares more than last year (+1.9%).

Adverse weather in southern Brazil continues to impact the soybean crop. Starting in mid-November in southern Brazil, the rainfall became light and scattered and the temperatures were above normal. As a result, Conab lowered the soybean yields in the three southern states. For Rio Grande do Sul, they are estimating that soybean yields will decline 15.6% compared to last season. For the state of Parana, they estimated that the yields would be down 10.7% and 7.7% in Santa Catarina.

In central Brazil they are expecting good yields except for isolated areas of Mato Grosso do Sul and Mato Grosso where short periods of drought could negatively impact local yields. In the new expansion area of Bahia, Piaui, Tocantins, and Maranhao the weather has been good thus far for crop development.

Most people do not realize that some of the soybeans in Brazil are actually produced in the Northern Hemisphere. The northern most state of Roraima borders on Venezuela and is actually in the Northern Hemisphere (its north of the Equator). Soybeans in this state are planted in April or May like they are in the rest of the Northern Hemisphere.