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Brazil lifts soybean export forecast, despite slow start to season


Brazil lifted its forecast for its soybean exports, despite their slow start, as it raised its estimate for the ongoing harvest, while making an even bigger upgrade to expectations for domestic corn production.


Conab, the official Brazilian crop bureau, pegged at “close to 86.1m tonnes” its forecast for the country’s soybean exports in 2020-21, compared with a previous estimate of “above 85.6m tonnes”, and above estimates from other commentators.


The US Department of Agriculture on Tuesday kept its estimate at 85.0m tonnes.


The bureau acknowledged that exports last month were, at “only” 2.89m tonnes, “very low”, and down 40% from February last year, a reflection of the “delay in harvesting” the crop.


However, with harvest now making stronger progress, Brazil should see “greater exports starting this month” – albeit the concentrated surge in supplies weighing on prices offered at ports to producers.


‘Still in the grain filling phase’

The slow start to harvest reflects the affects of weather extremes, with dryness around September-October last year slowing sowings, while rains have slowed fieldwork for earlier-harvesting areas.


However, for later-harvested crops, in an earlier stage of development when the rains arrived, the moisture has proved a boon in coming in time to boost yield prospects.


Conab raised by 1.31m tonnes to a record 133.8m tonnes its forecast for Brazil’s 2020-21 soybean output, with upgrades mainly to states such as Bahia, where rains came “exactly at the time when rain-fed crops were in the flowering and grain filling phase”, and Goais where many “crops are still in the grain filling phase”.


The estimate for output in top-growing state Mato Grosso, an early harvester, was lifted by a modest 236,000 tonnes, to 35.4m tonnes.


‘Certain climatic risk’

However, even in Mato Grosso, the rains had come in time boost early development of safrinha corn, sown as a follow-on crop to soybeans, for which Conab raised its Brazilian harvest forecast by 2.73m tonnes to 82.80m tonnes.


Factoring in a small downgrade to the first crop corn forecast, the all-corn output estimate was lifted by 2.56m tonnes to 108.1m tonnes, a rise of 5.55m tonnes year on year.


Conab acknowledged that - notably in Mato Grosso, also the top corn-producing state - the rains posed a test too, in hampering the ability of farmers to get their safrinha crops seeded.


“There is some concern about the fact that the ideal planting window ended on the last day of February and there is still a lot of area to be sown in the state, which results in a certain climatic risk,” the bureau said.


Money vs weather risk

However, it added that it was “important to emphasise” the boost to productivity prospects from the extra investment being made by farmers enriched by record prices of crops including corn.


This crop investment will “mitigate… adverse impacts” of any water shortfall that the late-sown crop may encounter.


And if the rains prove “prolonged and favourable, the average yield will be enhanced by the large investments that have been made”.


Noting the incentive provided by high prices for farmers to plant corn, even in less-than-ideal conditions, Conab raised by 322,000 hectares to 14.68m hectares its forecast for Brazilian safrinha corn sowings for 2020-21.


This upgrade included an extra 130,000 hectares pencilled in for Mato Grosso.


Biofuels demand

Conab stood by a forecast for Brazilian corn exports in 2020-21 of 35.0m tonnes despite the harvest upgrade, flagging extra demand of the grain for domestic ethanol plants, and seeing a bigger rebuild too in inventories.


The bureau noted “an increase in the growth rate of domestic consumption, especially the consumption of corn destined for the production of ethanol”.


For soybeans, said that domestic demand “is estimated between 45m-49m tonnes and should remain heated due to the growth of the economy, the increase in the production of meat for export,” and growth to 13%, from 12%, in Brazil’s blending rate of biodiesel in diesel.


Biodiesel is made from vegetable oils such as soyoil.

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