May 9, 2017

2017/18 Soybean Acreage in Brazil Unchanged or Up Only Slightly

Even though American farmers are in the early stages of planting their 2017 corn and soybean crops, it's never too early to look ahead at the 2017/18 crops in Brazil.

Over the next few months, Brazilian farmers will start purchasing their inputs for their 2017/18 soybean crop and I anticipate only a very small increase in the 2017/18 Brazilian soybean acreage, maybe unchanged to up 1-2%. Brazilian farmers have only sold approximately 50% of their recently harvested soybean crop due to low prices. Barring an increase in soybean prices due to a significant weather problem in the U.S., Brazilian farmers could still be holding significant quantities of their 2016/17 soybean production when they go to the fields to plant their 2017/18 crop.

Under that scenario, I don't see much enthusiasm in Brazil to clear more land or convert additional pastures to more soybean production.

Additionally, I think the 2017/18 Brazilian soybean yields will probably be lower than the sky-high yields recorded this past growing season. Brazilian soybean yields set all-time records this past growing season beating the old records by 15-20% in some locations. It is hard to imagine that Brazilian soybean yields will be higher in 2017/18 especially given the fact that farmers may try to economize on inputs given a bleak price outlook.

Therefore, I expect the 2017/18 Brazilian soybean production to be in the range of 105 to 110 million tons. This is just an educated guess at this point. Conab will issue their first estimate of the 2017/18 soybean acreage in their October report.