South America Calling

Estimates Reaffirm Larger Brazilian Soybean Area

With just a week to go before Brazilian farmers are allowed to plant their 2015-16 soybeans, new estimates underline prospects for a larger crop.

On Tuesday, INTL FCStone forecast area would rise 4.4%, principally due to expansion in traditional summer corn areas. For example, the southeastern state of Minas Gerais, the home of summer corn, is now increasingly a soybean state too.

Meanwhile, area will continue to grow in Mato Grosso, and particularly in the eastern Cerrado, on newly converted pasture and virgin land.

Early Wednesday, local forecaster Celeres also released their numbers, forecasting a more modest 2.3% increase to 79.5 million acres, based on much more limited growth in the Cerrado.

Celeres predicts a crop of 97 million metric tons (mmt), while FCStone says historic yield averages suggest output can top the 100-mmt mark.

Planting is not expected to get off to a flying start next week, though, principally because of the weather.

Charts show little more than showers for Mato Grosso over the next month.

Given that prices are depressed, margins are tight and pressure on logistics isn't as great as in previous years, farmers will likely wait until spring rains return before planting as good yields are a necessity in the coming season.

In the south, the west of Parana also plants early, but it has rained very heavily there this week, which is delaying preparation for planting. Still, short-term problems aside, the outlook is good for planting in this region.

Brazilian farmers have been planting earlier and earlier in recent years for two reasons. The first is that early harvesting creates better conditions for the second-crop corn that follows. The second reason is that damage from Asian soybean rust tends to intensify as the harvest progresses. Those who harvest first can spend less on fungicide and run lower risks of losses.

(CZ)

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