Brazilian Ag Consultancy, Celeres, Sees Larger Soy Crop

The Brazilian consultancy, Celeres, issued its latest estimate for the upcoming Brazilian soybean crop, forecasting soybean acreage totaling 79.5 million acres in 2015/16 – an increase of 2.3% over last season despite a drop in commodity prices.

"The soybean area will increase in 2015-16 in its last gasp of expansion," said Anderson Galvao, head of Celeres. "The locomotive is slowing down. Given current market conditions—with Chicago beans under $9 per bushel and the dollar-real exchange rate at around 4:1—I think we'll see a big cropping cost increase in 2016-17, and both companies and producers with dollarized debt will not be very liquid."

Brazilian soybean yields are expected to be 44.8 bushels per acre – a slight decline of about 1% from 2014/15, indicating production of 97.08 million tons for this growing cycle. Even with the marginal decreases in output, due to the favorable exchange rates with the devaluation of the Brazilian real, Brazil’s soybean exports for 2015/16 are forecast to be 50.7 million tons.

Celeres also expects Brazil to continue producing more second-crop corn. The main corn crop acreage is expected to be down by 2% to 14.5 million acres as more producers switch to soy, however, second-crop corn acreage is forecast to be up by 4.4% to a surprising 23.8 million acres with expected yields of 94 bushels per acre.

"The combination of main crop soybeans plus second-crop corn has shown itself quite profitable for producers, even in Mato Grosso,” said Mr. Galvao. “Any corn price level above $1.47 per bushel in Mato Grosso will incentivize producers, and increase winter corn production. So the second-crop corn crop will be up 3.2%."