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Nov 12, 2014

Conab Lowers Brazil's Soybean Estimate in November Report

In their second assessment of the 2014/15 Brazilian growing season, Conab reduced their estimate of soybean production by approximately 0.5 million tons. They now estimate the 2014/15 Brazilian soybean crop in the range of 89.34 to 91.74 million tons. The reason for the slight decline was stated to be continued slow planting progress especially in the center-west region and irregular rainfall thus far this growing season.

The Brazilian soybean acreage is expected to increase 2.3% to 5.3% to 30.87 to 31.69 million hectares. The average soybean yield is estimated at 2,894 kg/ha (42 bu/ac) which is slightly better than the 2,854 kg/ha (41.4 bu/ac) recorded last year.

They cited possible problems for the soybeans from a lack of rainfall in numerous areas including: northeastern Brazil, western Minas Gerais, Sao Paulo, and parts of Parana, Mato Grosso, Mato Grosso do Sul, and Goias.

Conab is estimating the total Brazilian corn crop at 77.3 to 78.9 million tons or 1.2% to 3.2% less than last year. This assessment is probably too high because they are using the same safrinha acreage as last year and the general consensus is that the safrinha corn acreage will decline in 2014/15, it's just a matter of how much.

Brazilian farmers have opted to reduce their full-season corn acreage in favor of additional soybean production. The full-season corn acreage in Brazil is expected to decline 4.3% to 8.7% with the biggest declines in southern Brazil. The full-season corn acreage in northeastern Brazil might actually increase a little. The full-season corn yield is estimated at 4.642 (71.5 bu/ac), which is down 2.9% from last year's yield of 4,783 kg/ha (73.6 bu/ac). As a result, the full-season corn production is estimated at 27.9 to 29.5 million tons or 6.8% to 11.8% less than last year.

Conab's safrinha corn estimate is incomplete because they are using last year's safrinha corn acreage, but there is a very high probability that the acreage will decline in 2014/15. Interestingly, they actually increased their estimate for the safrinha corn yield compared to last year. The safrinha corn yield is estimated at 5,381 kg/ha (82.8 bu/ac) or 2.4% more than last year at 5,255 kg/ha (80.9 bu/ac). If the safrinha corn crop is planted later than normal as everyone expects, than anticipating a higher yield than last year may be overly optimistic.