Positive margins will prompt Brazilian soybean farmers to raise planting area by 2.6% in the 2016-17 season to 83.5 million acres, Celeres, a local farm consultancy, predicted Tuesday.
Area would grow further were it not for the difficulty that famers are encountering in accessing credit, the consultancy said in a report.
The credit crunch is particularly pronounced in areas that suffered losses last season, such as the northeastern states of Bahia, Piaui and Maranhao.
Based on 15-year average yield curves, Celeres forecast soybean production will rise 5% to 102.8 million metric tons (mmt) next season.
The estimate is in line with industry forecasts amid a consensus that the La Nina weather phenomenon will not have a significant impact on the crop. Traditionally, La Nina has a positive impact on yields the top-producing state of Mato Grosso and the rest of the Center-West, as well as the northeast, while increasing weather instability in Parana, the No. 2 soy state, and Rio Grande do Sul, the No. 3 state.
The compulsory fallow period ends in Mato Grosso and other key regions on Thursday and farmers can start planting soybeans.
However, after getting burnt by drought last year, farmers will likely be less willing to plant before significant springs rains moisten the soils. With heavy showers forecast for the second half of September, planting will likely pick up pace in the southern state of Parana over the next few weeks. In contrast, major showers are only forecast for Mato Grosso in mid-October, and planting will likely get off to a slow start there.
Celeres highlighted that robust domestic and international demand will create keen competition for Brazilian beans next year. It predicts next season's soybean exports will rise 3.7% to 56 mmt.
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