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July 9, 2020

Conab Increases Soy Estimate 0.4 mt, Lowers Corn Estimate 0.4 mt

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

In their July Crop Report, Conab increased the 2019/20 Brazilian soybean estimate 0.4 million tons while they lowered the 2019/20 Brazilian corn estimate 0.4 million tons.

The 2019/20 Brazilian soybean production was increased 0.4 million tons from the June estimate to 120.8 million tons. The Brazilian soybean production is now 5.1% larger than the 115.0 million tons produced in 2018/19. The soybean acreage increased 3.0% in 2019/20 to 36.94 million hectares (91.2 million acres).

The total 2019/20 Brazilian corn production was lowered 0.4 million tons to 100.5 million tons. The 2019/20 Brazilian corn crop is now 0.5% larger than the 100.0 million tons produced in 2018/19. The safrinha corn production was lowered 0.7 million tons to 73.4 million due to lower yield estimates. The safrinha corn yield in July was estimated at 5,370 kg/ha (82.6 bu/ac) compared to 5,406 kg/ha in the June report (83.2 bu/ac).

Brazilian farmers planted 13.73 million hectares of safrinha corn in 2019/20 (33.9 million acres), which was an increase of 6.3% compared to 2018/19. Even though the safrinha corn acreage increased 6.3% in 2019/20, the safrinha corn production only increased 0.5% due to disappointing yields especially in the state of Parana. The safrinha corn now represents 73% of Brazil's total corn production.

Mato Grosso is the largest safrinha corn producing state in Brazil and the weather in the state this year was less than ideal which did not permit the corn to reach its full yield potential. In the southern safrinha corn producing states of Parana, Mato Grosso do Sul, and Sao Paulo, a significant portion of the safrinha corn was planted after the ideal planting window had closed and subsequent dry weather resulted in disappointing corn yields.

The soybean and corn crops represent 88% of Brazil's total 2019/20 grain production of 251.4 million tons. During the first half of 2020, Brazil exported 60.3 million tons of grain which was 38% more than the same period last year. The devaluation of the Brazilian currency, which made Brazilian grain more competitive in the international market, was the main stimulus for the increased exports.

Conab estimated that Brazilian farmers increased their 2020 wheat acreage 13.7% to 2.32 million hectares (5.73 million acres) and that Brazil will produce 6.3 million tons of wheat. Brazil will still need to import 7.3 million tons of wheat to meet domestic demand.