Brazil Expecting Record Soybean Crop
Brazil’s 2012/13 soybean production estimate has risen by one million metric tons (mmt) to a record 83 mmt. The Brazilian Ministry of Agriculture’s Food Supply Company estimated soybean bean production at 82.6 mmt in its December 2012/13 crop survey.
Crop conditions are rated good across all major producing regions, with some isolated areas receiving less than desirable rainfall across states in the center-west and northeast regions. Accounting for over 60% of national production, the top three producing states of Mato Grosso, Parana, and Rio Grande do Sul all have good crop conditions.
The 2012/13 Brazil soybean harvest has recently commenced in the top producing state of Mato Grosso, a state which accounts for 30% of national production. Mato Grosso has forward sold a record 67.7% of the state’s forecast crop, according to its Institute of Agricultural Economics.
The national 2012/13 soybean crop is now estimated at over 50% forward sold compared with the five-year average of approximately 30% sold at this time in the crop season. Spurred by a favorable exchange rate and futures prices, contracts for March delivery were nearly all forward sold prior to planting in October.
Traders report that there was less activity during November due to the already record committed crop sales.
Trade sources confirmed an uptick in December in negotiations for February export contracts as China and other importing nations shift attention to the record forecast crop in Brazil and across South America.
However, the delayed planting this season pushed back the export window with an estimated two mmt to be exported in February. Exports volumes are expected to peak in April at an estimated six mmt and maintain high volumes of over five mmt through June, weather permitting.
In July soybeans will began to compete with corn and sugar for inland and port logistics to market, as a result of this and in the wake of the upcoming U.S. crop, monthly export volumes are expected to fall throughout the rest of the marketing year.
The devaluation of the Brazilian Real to the U.S. Dollar has favored export sales commitments in the past few months with the exchange rate reaching over R$2.00 to US$1.00. Post increased Brazil’s 2012/13 forecast soybean exports by 500,000 mt to a record 39 mmt.