National Supply Company estimates record grain harvest

In its first estimate for Brazil’s 2024/25 grain harvest, the National Supply Company (CONAB) projected production at 322.5 million tonnes, an 8.3% increase over the 2023/24 cycle. This rise is primarily driven by an expansion in the planted area. If the estimate holds, it will mark a new production record.

CONAB attributes the expected growth to a 1.9% increase in crop area, bringing the total to 81.34 million hectares. Average crop yields are also anticipated to climb by 6.2%, reaching 3,964 kilograms per hectare.

However, CONAB notes that the projected productivity is based on statistical models, as the second and third planting phases for the 2024/25 crops are still far off. Currently, soybeans, first-crop corn, and beans are being sown.

For soybeans, Brazil’s flagship crop, CONAB predicts a 2.8% increase in the sown area despite delays in planting due to dry weather and irregular rainfall. As of October 13, 9.1% of the projected area had been planted—compared to 19% at the same time in the 2023/24 harvest.

The chart below uses DataLiner-derived data to compare each month’s soy export volume at Brazilian maritime ports in the period comprising the first eight months of the year between 2021 and 2024. Readers may request a demo at Datamar’s website, linked below.

Soy Exports from Brazil | Jan 2021-Aug 2024 | WTMT

Source: DataLiner (click here to request a demo)

Paraná leads with 33% of its soybean area planted, while in Mato Grosso, the country’s largest producer, only 7.8% of the estimated area has been cultivated, largely limited to irrigated land. In the previous harvest, Mato Grosso had already planted 35.2% of its soybean area by this point. Despite the delays, CONAB forecasts national soybean production to grow by 12.7%, reaching 166.05 million tonnes.

Summer corn is expected to see a 5.4% reduction in sown area, falling to 3.76 million hectares. As a result, production is predicted to reach 22.72 million tonnes, a slight 1.1% decrease from 2023/24. However, when considering all three corn crops, CONAB projects a total harvest of 119.7 million tonnes, 3.5% higher than the previous cycle.

The second corn crop, crucial to the total output, is forecast to increase by 4.8% to 94.6 million tonnes, but planting will not begin until April, after the soybean harvest, which has been delayed by unfavorable weather.

The first 2024/25 survey also revealed a 9.9% increase in the country’s rice area. Rice became a focal point earlier this year when the federal government launched and then canceled auctions to buy imported products, citing concerns over supply following floods in Rio Grande do Sul, the nation’s largest rice-producing state.

According to CONAB, the significant growth in rice planting is primarily driven by expansions in the Central-West and Southeast, with increases of 33.5% and 16.9%, respectively. The South is also expected to see an 8.7% rise.

As a result, CONAB projects national rice production to reach 12 million tonnes—nearly 2 million tonnes more than the 2023/24 harvest.

A slight rise in the sown area is forecast for beans, increasing from 2.86 million hectares in the 2023/24 harvest to 2.88 million hectares in 2024/25. Across all three bean-growing cycles, CONAB expects total production to reach 3.26 million tonnes, a 0.5% increase over the previous cycle.

Cotton is expected to see a 2.9% expansion in planting area, reaching 2 million hectares, with production remaining stable at 3.7 million tonnes.

The chart below shows the evolution of the pace of Brazil’s cotton exports since January 2022. The data is from DataLiner.

Cotton Exports | Jan 2022 – Aug 2024 | TEUs

Source: DataLiner (click here to request a demo)

In contrast, wheat production is projected to decline. CONAB lowered its forecast on Tuesday (15) for wheat output by 6.2% to 8.26 million tonnes, down from the initial pre-planting estimate of 10.2 million tonnes. In 2023, 8.09 million tonnes were harvested.

CONAB attributed the revision to adverse weather conditions throughout the growing season, particularly in Paraná. “Drought at the beginning, insufficient cold spells, two frost events, and the spread of diseases have contributed to this reduction,” CONAB noted in its report.

Ana Luiza Lodi, a grain market intelligence specialist at StoneX, said CONAB’s overall grain production estimate aligns with market expectations. “Our estimate is slightly lower, but the general consensus points to slower growth in planted areas compared to recent years, when increases ranged from 5% to 6%,” she explained.

StoneX projects a 1.5% rise in planted area. “The more modest growth reflects lower prices, especially for soybeans, over the past year and a half,” Ms. Lodi added.

Safras & Mercado analyst Luiz Fernando Roque is more optimistic about the soybean harvest, calling CONAB’s forecast conservative. “We estimate soybean production at 171.8 million tonnes, with higher productivity,” he noted.

Mr. Roque also highlighted that the anticipated weaker and shorter La Niña event could favor crop development. “October and November rainfall forecasts point to regular precipitation, and if confirmed, Brazil will be able to fully capitalize on its production potential,” he said.

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