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June 12, 2015

Conab Increases Brazilian Soybean and Corn Estimates

In their June estimates of the 2014/15 Brazilian crops, Conab increased both the soybean and corn estimates. The 2014/15 soybean estimate was increased 0.9 million tons to 96.0 million tons and the 2014/15 Brazilian corn estimate was increased 1.6 million tons to 80.2 million.

The bigger adjustment in the June report was for the safrinha corn crop. In the May report, Conab surprised the market by lowering the safrinha corn estimate. In the June report, they reversed course and significantly increased the safrinha corn estimate. The 2014/15 safrinha corn crop in Brazil is now estimated at 49.37 million tons or 1.5 million tons more than the May estimate.

The increase in safrinha corn production came primarily from higher acreage and a small increase in the projected yield. Conab is estimating the safrinha corn acreage at 9.32 million hectares or 245,000 hectares more than last month. If these estimates are realized, the safrinha acreage would be up 1.3% compared to last year and the total safrinha corn production would be up 2% compared to last year.

Even with these increased in safrinha corn production, Conab might still be underestimating the Brazilian corn crop. Mato Grosso is the largest safrinha corn producing state in Brazil and the Mato Grosso Institute of Agricultural Economics (Imea) is estimating the safrinha corn crop significantly higher than Conab. Imea is estimating the safrinha crop in Mato Grosso at 20.33 million tons or 2.4 million tons more than Conab's 17.88 million tons.

Both Conab and Imea have basically the same safrinha corn acreage in Mato Grosso, but their estimates of the safrinha corn yield are very different. Conab is estimating the safrinha corn yield in Mato Grosso at 5,461 kg/ha (84.1 bu/ac), whereas Imea is estimating the corn yield at 6,198 kg/ha (95.4 bu/ac) or a difference of 11.3 bu/ac. The early corn harvest has begun in Mato Grosso and farmers are reporting very good yields, so it is possible that Conab will increase their corn estimate again in their July report.