Brazil’s Conab slashes soy crop forecast but still sees large output

Brazilian farmers will produce a record soybean output in the 2023/24 cycle even after bad weather led crop agency Conab on Wednesday to cut expected production by some 5 million metric tons.

Conab said the El Niño pattern had brought excessive heat and dryness in the center of Brazil and too much rain in the south.

As a result, Conab pegged soybean output at around 155.3 million tons, 4.2% lower than an initial forecast.

Conab said harvesting had begun early and was underway in areas of Mato Grosso, Brazil’s leading grain state.

It said high temperatures and water shortages, mainly in the Central-West Region, had spoiled plants on some fields.

Conab said average soy yields for the 2023/24 harvest will be 2.2% lower compared to last season, at 3,431 kilograms per hectare.

Private forecasters also said Brazil’s soy crop outlook had worsened. At least two lowered output expectations for the crop in January, to between 151 million tons and 153 million tons.

Conab has kept a conservative view on corn as well, saying total output will fall by almost 11% to an estimated 117.6 million tons.

The agency mentioned a reduction in corn’s planted area and said lower production of second corn was expected.

Second corn, which is planted after soybeans are harvested in the same fields, faces increased climate risk this season. That crop represents about 75% of national production in a given year.

Reduced corn production will affect Brazil’s ability to export, Conab data shows.

The country is expected to ship some 35 million tons of corn this season, down from 56 million tons in the previous one, when it surpassed the United States as the world’s top corn supplier.

Brazil should remain the world’s top soybean exporter, shipping an estimated 98.4 million tons in the 2023/24 cycle, Conab said.

That compares with a record of 101.8 million tons from the previous one.

(Reporting by Ana Mano; editing by Jason Neely, Tomasz Janowski and Barbara Lewis)

Source: Reuters via Nasdaq

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