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January 12, 2015

Conab Increases Soybean Estimate Slightly in January Report

In their January Report released last Friday (January 9th), Conab increased the 2014/15 Brazilian soybean estimate by 100,000 tons to 95.9 million tons. The 2014/15 Brazilian soybean acreage declined 40,000 hectares from the December Report, but the expected soybean yield was increased 0.1 bu/ac to 43.9 bu/ac (3,033 kg/ha).

The survey for this report was conducted between December 14 and December 20, so the data used to compile this report was approximately three weeks old before the report was released. Therefore, I do not think the Conab report fully reflects the current state of the soybean crop in Brazil - let me explain.

In their monthly reports, Conab lists how the weather patterns in various regions of Brazil might impact the crops. They put the weather patterns into four different categories including: favorable rains, possible problems from too much rain, reduced rainfall benefiting harvesting, and possible problems from lack of rainfall. Since the survey for the January report was conducted during the third week of December, they only listed the soil moisture conditions as of the end of November.

As you can see from the list below, Conab basically classified all of Brazil as favorable for soybean development at the end of November except for a small area of south-central Parana. Therefore, it is easy to see why they are optimistic concerning the 2014/15 Brazilian soybean crop. When the survey was completed, everything in Brazil looked fine as far as soil moisture was concerned.

Potential Impact of Precipitation on 2014/15 Brazilian Soybeans

Favorable Rains Possible problems from too much rainReduced rainfall benefiting harvestingPossible problems from lack of rainfall
Eastern RondoniaNoneNoneEastern Maranhao
Southeastern ParaSouth-central Parana
All of Tocantins
Southern Maranhao
Southwestern Piaui
Western Bahia
Western Minas Gerais
Southern and northern Sao Paulo
All of Parana except south-central
All of Santa Catarina
All of Rio Grande do Sul
All of Mato Grosso do Sul
All of Mato Grosso
All of Goias
All of the Federal District

Source: Conab January Crop Report - January 9, 2015

Since the survey for the January Report was completed during the third week of December, a dryer than normal weather pattern has developed especially in central and eastern Brazil in states like Goias, Bahia, Minas Gerais, Sao Paulo, as well as parts of eastern Mato Grosso.

In their January Report, Conab increased the Brazilian corn estimate slightly by 0.36 million tons to 79.0 million. The increase was due to a slightly higher yield forecast for the full-season corn crop. They made no changes in the safrinha corn estimate. In fact, they did not even mention safrinha corn production other than carrying forward their estimate from prior months.