Brazil lowers soy output estimate, maintains record

Brazilian soybean production is still expected to reach a record level in the 2020-21 season, but the new forecast of 133.7mn metric tons (t) is lower than the 134.5mn t estimate last month, as unfavorable weather has hampered the crop's development.

The quantity is also lower than the 134.9mn t expected in November by the country's agricultural statistics agency Conab. The harvest of the current season's crop has already started and will accelerate in the coming weeks, shadowing a delay in planting.

But as rainfall returns, the expectation "remains optimistic for the harvest performance, supported by the strong Chinese demand and the favorable exchange rate", the agency said.

According to Conab, Brazilian soybeans exports might be over 85.7mn t in 2020-21, up by 3.2pc in comparison to 2019-20. Internal consumption is expected to reach up to 49mn t, supported by the economic recovery, increasing use for animal feed and the application for biodiesel.

The agency pegged Brazil's corn output at 102.3mn t, compared with 102.6mn t estimated last month. This outlook reflects not only unfavorable climate conditions but also a 6.9pc reduction in summer crop production over the prior season. The winter crop (safrinha) is the main corn crop and might reach 76.8mn t, a 2.3pc increase over the prior season.

For domestic consumption of corn, the agency kept the outlook at 71.8mn t for 2020-21 season. The exports estimate was also flat at 35mn t.

Outlook drops for all grains and oilseeds

Brazil's 2020-21 grains and oilseeds harvest, which also includes cotton lint, wheat, peanuts and others, is expected to reach 264.8mn t, 0.4pc lower than December´s forecast. Despite the lower outlook, the harvest is still expected to reach a record and rise by 3.1pc over the prior season. The forecast is supported by a 1.6pc growth in the planted area over the last season, to 67mn ha.

After adverse climate conditions at the beginning of summer planting as a result of the La Niña's weather pattern, weather conditions are expected to be normalized in the great majority of planting areas, leading productivity to perform well this season. There is a 70-90pc chance that La Niña will continue until the February-April period, according to the agency.

By Renata Cardarelli