October 7, 2011

Conab Releases First Estimate of 2011/12 Growing Season

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

In their first estimate of the 2011/12 growing season in Brazil, Conab is estimating that the total row crop acreage in Brazil will increase from 49.9 million hectares to 50.4 to 51.4 million hectares. Total grain production is expected to decline 1.5% to 3.7% from 162 million tons in 2010/11 to 157 to 160 million tons in 2011/12.

Corn and soybean acreage is expected to increase while rice and dry bean acreage is expected to decline. Farmers in southern Brazil are currently planting their 2011/12 full-season corn crop and the corn acreage is expected to increase 4% to 7%. The Conab report indicated that they did not survey the potential acreage for the safrinha corn crop which will be planted in January or February. They said that the safrinha planting was still several months away and that they would evaluate the potential safrinha corn acreage in subsequent reports. Therefore, they basically left the safrinha corn acreage unchanged from last year.

By all indications, the safrinha corn acreage will probably increase in 2011/12 compared to 2010/11. Farmers took advantage of the very strong corn prices and in Mato Grosso for example, have already forward contracted nearly half of their intended safrinha corn production even though planting is several months away. They have already received partial payment for the crop and they have a contractual obligation to deliver the corn.

In addition the planting weather for soybeans is relatively good in Brazil, so the soybeans will be planted in a timely fashion which means that the safrinha corn may also be planted in a timely manner. With money in their pockets and a commitment to produce the corn, it seems likely that Brazilian farmers will increase their safrinha corn acreage if the weather cooperates in January and February.

Conab expect the 2011/12 soybean acreage to increase 2% to 3.5%. While the acreage is expected to be higher, the nationwide yields are expected to be lower than last year's record crop. Conab is estimating the 2011/12 soybean yield at 2,927 kg/ha (42.4 bu/ac) compared to the 3,115 kg/ha (45.1 bu/ac) produced in 2010/11.