June 10, 2016

Conab Reduces Soybean and Corn Estimates in June Crop Report

In their June Crop Report, Conab lowered their estimates for both the 2015/16 soybean and corn crops. The 2015/16 Brazilian soybean crop is now estimated at 95.63 million tons, which is down 1.27 million tons from their May estimate of 96.90 million tons. The Brazilian soybean crop is now 0.6% or 0.59 million tons smaller than last year's crop which was 96.22 million tons. The soybean yield is now estimated at 2,882 kg/ha (41.7 bu/ac), which is down from their May estimate of 2,929 kg/ha (42.7 bu/ac).

Soybean yields in Mato Grosso, which is the largest soybean producing state in Brazil, are estimated at 2,851 kg/ha (41.3 bu/ac) or the lowest soybean yield since 2005/06. Soybean yields in northeastern Brazil also ended up much below expectations especially for the last harvested soybeans. In addition to adverse weather in northeastern Brazil, the soybean crop in the region was impacted by a severe infestation of white flies.

Conab is currently estimating the 2015/16 Brazilian soybean crop at 95.63 million tons with exports estimated at 54.10 million tons and domestic demand estimated at 42.5 million tons. As a result, they are estimating ending stocks at just 0.455 million tons, or approximately 4 days of domestic consumption! With increased exports and a very tight domestic supplies, old-crop soybean prices in Brazil are at historically high levels.

The big change in Conab's June report was for the Brazilian corn crop. Conab is now estimating the Brazilian corn crop at 76.22 million tons or 3.73 million less than their May estimate of 79.95 million tons. The 2015/16 Brazilian corn crop is now 8.44 million tons (-10%) smaller than the 2014/15 crop which was 84.57 million tons.

Conab lowered the full-season corn estimate by 0.81 million tons from 27.04 million in May to 26.22 million in June. The full-season corn crop now accounts for 34% of Brazil's total corn production.

The biggest change in this month's report was for the safrinha corn crop. Conab lowered the safrinha corn production by 2.91 million tons from 52.90 million in May to 49.99 million in June. The safrinha corn crop now accounts for 65.5% of Brazil total corn crop. The safrinha corn yield is now estimated at 4,864 kg/ha (74.9 bu/ac) compared to 5,204 kg/ha in May (80.14 bu/ac). In 2014/15 the safrinha corn yield was 5,716 kg/ha (88.0 bu/ac).

The full-season corn acreage in 2015/16 was down 11% compared to last year as farmers switched some of their full-season corn to soybeans instead. The 2015/16 safrinha corn acreage increased 7.6%, but hot and dry weather severely impacted the crop. Mato Grosso is the largest safrinha corn producing state in Brazil, but corn yields in the state this year are down 12.5% compared to last year. The 2015/16 corn yield in Mato Grosso is estimated at 5,296 kg/ha (81.5 bu/ac) compared to last year when the corn yield was 6,056 kg/ha (93.2 bu/ac).

Parana is the second largest safrinha corn producing state and the corn yields in Parana are estimated at 5,860 kg/ha (90.2 bu/ac), which is nearly identical to last year.