Brazil lays claim to top rank in soybean output

Brazil laid claim to the title of the world's top soybean producer, overtaking the US for the first time, by estimating its harvest at a record 90.0m tonnes, citing the impact of "good" prices and benign weather in boosting prospects.

Brazil's Conab crop bureau, in a much-watched report, pegged the domestic soybean crop this season at the top end of a range of 87.9m-90.2m tonnes previously outlined.

The harvest would trounce the current record of 81.5m tonnes set last season, besides besting the 88.7m tonnes that the US has achieved for 2013-14, on US Department of Agriculture estimates.

While the USDA is updating its crop data later on Tuesday, in its monthly Wasde crop report, the briefing is not expected to alter estimates for domestic crop production, although many investors believe an upgrade may be on the way with the January briefing.

'Prices are still good'

Conab said its upbeat forecast reflected in part expectations of a rise of 6.2% to 29.5m hectares in plantings, equivalent to 72.9m acres, actually a little smaller than the 76.5m acres that US growers sowed this year, and encouraged by relatively high prices.

"On the domestic market, soybean prices are still good," at between R$59.00-67.00 per 60 kilogramme-bag in Mato Grosso, the top producing state, and $75.00 per bag in Parana.

However, yield prospects were encouraging too, thanks to benign weather, with the harvest expected to come in at 3.06 tonnes per hectare, equivalent to 45.5 bushels per acre.

That is more than the 43.0 bushels per acre that US farmers achieved this year.

'High destructive power'

Conab acknowledged that the corn earworm, Helicoverpa armigera, represents a threat to the domestic soybean crop, with the moth's caterpillars having "high destructive power".

In the south east in particular the bureau highlighted farm concern of "the intensification of the pest attacks, notably of Helicoverpa armigera, which already has been detected in some newly planted areas, causing great impact on… yields".

However, outbreaks are being tackled by insecticide campaigns, albeit at expense to farmers, raising production costs and causing "consequent decrease in profitability".

Corn forecast

The extra soybean area this year will come in part at the expense of corn, for which Conab pegged Brazil's plantings for main crop at 6.42m hectares, a drop of 5.9%.

Parana will see a fall of more than 200,000 hectares.

However, farmers in some more states in the north east, such as Maranhão and Piauí, are increasing plantings despite patchy rains, on expectations of tapping local demand.

Overall Brazilian production will reach 78.8m tonnes, at the bottom end of the range of 78.5m-79.8m tonnes previously expected, a cut of 2.2m tonnes year on year.

The forecast assumes that output from the second, safrinha crop, planted early in the calendar years, will match last season's 46.2m tonnes, although there are increasing expectations of a decrease, given lower prices this time.

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