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November 9, 2012

Conab Expecting Record Large 2012/13 Soybean Crop in Brazil

In their second monthly assessment of the 2012/13 growing season, Conab is now estimating that the Brazilian soybean crop will be in the range of 80 to 83 million tons, which is just slightly higher than last month's estimate. The 2012/13 soybean acreage is expected to increase from 5.5% to 9.3% to 26.4 to 27.3 million hectares. That compared to 25.0 million hectares of soybeans grown in 2011/12. The average soybean yield is estimated at 3,031 kg/ha (43.9 bu/ac) compared to a yield of 2,661 kg/ha (38.5 bu/ac) in 2011/12. If realized, the 2012/13 soybean crop in Brazil would be approximately 20-25 million tons larger than the 66.3 million tons produced in 2011/12.

The increased soybean acreage is coming at the expense of cotton, rice, dry beans, and pasture. Record soybean prices earlier in the year convinced many farmers to forgo some of their traditional crops and even to convert some pastureland to additional soybean production. The top three soybean producing states in Brazil remain Mato Grosso, Parana, and Rio Grande do Sul, which would be responsible for 29%, 18.5%, and 14.7% of the total Brazilian soybean production respectively.

The full-season corn acreage in Brazil is expected to decline 5.0% to 7.7% reflecting a desire on the part of the farmers in southern Brazil to plant additional acreage of soybeans. The full-season corn yields are estimated at 4,904 kg/ha (75.5 bu/ac), which is 9.5% higher than last year. The full-season corn production is estimated at 34.1 to 35.4 million tons.

Conab did not conduct a separate survey concerning the safrinha corn crop which won't be planted for several more months so they left the safrinha corn acreage unchanged from last year. The safrinha corn acreage has been increasing in recent years as farmers plant more soybeans which can be followed by safrinha corn production. The safrinha corn acreage is expected to increase this growing season as well, but we won't know for sure until the soybean crop begins to be harvested early next year. Conab is expecting the safrinha corn yield to decline slightly from last year's yield of 5,133 kg/ha (79.0 bu/ac) to 4,917 kg/ha (75.7 bu/ac).

Combining the two crops, Conab is estimating that the 2012/13 Brazilian corn crop will be 71.5 to 72.8 million tons, which could be down as much as 2% compared to last year. Conab is estimating that Brazil will export 19 million tons from the 2011/12 corn crop and 15 million tons from the 2012/13 corn crop.

While there are some concerns about the soybean planting being delayed by dry weather, the report did not address the weather issue at all. Some of the earlier planted soybeans will also have to be replanted once additional rainfall is received and that could also result in lower soybean yields.