South America Calling

Brazil's Mato Grosso Soy Area Seen Near Flat in 2016-17

Brazil's top-producing state of Mato Grosso will not significantly increase soybean planted area in 2016-17 for the first time in nine years, a state farm institute forecasted.

Area planted with oilseed in the state will rise just 0.28%, to 22.8 million acres, in the 2016-17 season which begins in September, according to the Mato Grosso Farm Economy Institute (IMEA).

Farmers are being more cautious after the poor performance of the 2015-16 crop, said the institute, which is farm funded. Last season, dry weather clipped yields across the center-north and the northeast of the state.

But yields are expected to bounce back next season, reaching an average 47 bushels per acre, based on 'favorable climatic conditions and continued investment in technology.'

As a result, production is expected to rise 6.9%, to 29.4 million metric tons (mmt), said IMEA's first crop survey.

Planted area will expand most in the north and northwest of the state, at 3.5% and 1.5% respectively, while growth will be more limited at 0.29% in the center-north, a major region where yields disappointed last year.

Mato Grosso accounts for around 30% of Brazil's soybean planted area.

Across Brazil as a whole, analysts are expecting only a 1% to 2% increase in area in the 2016-17 season in a break from the recent fast expansion.

In addition to disappointment over poor yields in 2015-16, farmers will likely limit expansion on restrictions in access to credit amid the ongoing economic crisis and due to a preference for alternative crops such as corn and cotton.

Brazil is the world's No. 2 soybean producer after the U.S.

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

(ES)

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