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November 10, 2011

Conab Estimates Higher Corn and Lower Soy Prod. In 2011/12

In their second monthly evaluation of Brazilian crop production, Conab is estimating that the Brazilian soybean acreage will increase 1% to 3% and the total soybean production is estimated at between 71.4 to 72.9 million tons (down 3% to 5%). They estimated the corn acreage will increase 4.4% to 5.9% and the total corn production is estimated at 58.4 to 59.4 million tons (up 1.6 to 3.4%).

In their report, Conab indicated an increase in full-season corn acreage (up 7.8% to 10.3%), but they did not conduct a survey concerning the 2011/12 safrinha corn acreage. They stated that it was too early to assess the safrinha acreage so they assumed the safrinha corn acreage would be unchanged from 2010/11. The full-season corn acreage is expected to increase 31% in the state of Goias, 28% in Mato Grosso do Sul, and 13% in Rio Grande do Sul. The reason for the big corn increase is good prices and farmers taking advantage of the strong corn price to increase their crop rotations.

The nationwide yield of the full-season corn crop is estimated at 4,363 kg/ha (67 bu/ac), which is a decline of 3.9% compared to the yield of 4,538 kg/ha (70 bu/ac) recorded in 2010/11. They indicated that they used the five-year average yield for full-season corn production in Brazil.

Conab estimated that the soybean acreage will increase 0.9% to 3%, which is slightly lower than their October report. The soybean acreage will increase 5% in Mato Grosso (330,000 hectares) to 6.7 million hectares. In the new agricultural frontier of northeastern Brazil which includes the states of Maranhao, Tocantins, Piaui, and Bahia, the soybean acreage is expected to increase 6 to 9.5%.

Farmers in Parana, which is the second largest soybean producing state in Brazil, are expected to reduce their soybean acreage by 3% to 5% (down 137,000 to 229,000 hectares) due to an increase in corn acreage in the state.

The nationwide soybean yield was estimated at 2,930 kg/ha (42.4 bu/ac), which is 6% less than the 3,115 kg/ha (45.1 bu/ac) recorded last growing season. The soybean yield that they used is also the five-year average yield. The 2010/11 soybean crop ended up with record yields in all the states except for Mato Grosso do Sul where heavy rains during planting and harvesting negatively impacted the crop.

The two major crops in Brazil that will lose acreage in 2011/12 are rice (down 2.3 to 5.2%) and dry beans (down 5 to 9%).