South America Calling

Brazil's Agriculture Ministry on Thursday took a conservative view on the potential of the soybean crop in its first forecast for the 2014-15 grain season.

The world's No. 2 crop was pegged at 88.9 million to 92.4 million metric tons (mmt). That's up 3.2% to 7.3% from last year but below the range on private forecasts that roughly goes from 92 mmt to 96 mmt.

Farmers will increase area despite the slide in soybean prices, said the report issued by the ministry's National Supply Corp (CONAB).

Forecast area growth was lower than market consensus. CONAB predicts acreage will expand between 1.4% and 5.5% to 75.6 million to 78.6 million. Most private forecasts peg growth at the top end of this range.

CONAB's figures are closely watched as it conducts comprehensive field surveys to compile its report.

Thursday's report made no mention of the current planting conditions. While long-term crop forecasts predict ample spring and summer rains for Brazil's soybean-growing regions, no significant rain is predicted for Mato Grosso and the rest of the Center-West for the next 10 days, which will likely delay planting.

First-crop corn area is seen falling between 4% and 11% to 14.6 million to 15.7 million acres in 2014-15 as farmers switch to soybeans. Most private forecasts put the decline at around 10%.

CONAB forecasts first-crop corn output will drop 7% to 14% to 27.2 mmt to 29.5 mmt.

Overall grain production is seen rising 1% to 3% to 194.0 mmt to 201.6 mmt in 2014-15.

Alastair Stewart can be reached at alastair.stewart@dtn.com

(AG)

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