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November 10, 2017

Conab Increases Brazil Soy Slightly, Lowers Brazil Corn Slightly

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

In their October Crop Report, Conab increased the 2017/18 Brazilian soybean estimate slightly and they lowered the 2017/18 corn estimate slightly.

For the 2017/18 Brazilian soybean crop, they are now estimating that the crop will be 106.4-108.6 million tons (mid-range is 107.5 million tons). This compares to their October estimate of 106.0-108.2 million tons (mid-range is 107.1 million tons). If realized, the 2017/18 soybean production would be down 5.4-7.6 million tons from last year's production of 114.0 million tons (-4.8% to -6.7%).

The 2017/18 Brazilian soybean acreage is expected to increase 2.1% to 4.2% to 34.6-35.3 million hectares (85.4-87.1 million acres). The 2016/17 Brazilian soybean acreage was 33.9 million hectares (83.7 million acres). The 2017/18 soybean yield is estimated at 3,075 kg/ha (44.5 bu/ac), which is down 8.6% from last year's yield of 3,364 kg/ha (48.7 bu/ac).

The bottom line is that the soybean acreage is up, but the soybean production is down due to a lower yield forecast. Even though the soybean yields in 2017/18 may be near trend line, they will be significantly below the record yields of 2016/17.

For the 2017/18 Brazilian corn crop, Conab is now estimating the crop at 91.6-93.1 million tons (mid-range is 92.3 million tons). This compares to their October estimate of 92.2-93.6 million tons (mid-range is 92.9 million tons). If realized, the 2017/18 corn production would be down 4.7-6.1 million tons from last year's production of 97.8 million tons (-4.9% to -6.3%).

The full-season corn acreage is expected to decline 7.5%-11.5% from last year due to low corn prices and farmers switching some of their intended corn acreage to additional soybean production. The full-season corn yields is also expected to decline 8.7%. The total full-season corn production is estimated at 24.4-25.8 million tons, which would be down approximately 5 million tons from last year. If verified, the full-season corn production would represent approximately 27% of Brazil's total corn production.

For the safrinha corn production, Conab carried forward last year's acreage (12.1 million hectares - 29.9 million acres), and the yield was trimmed 0.2 bu/ac from last year. If this preliminary assessment is verified, the safrinha corn production would account for 73% of Brazil's total corn production.