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Wall of soybeans
Domestic production of the 2012-2013 corn and soybean harvest is expected to reach 180.41 million tons, according to Brazil's Ministry of Agriculture.
It has been expected for a while, but it looks like it will happen this year. Brazil is likely to become the world's largest soybean-producing country, replacing the U.S. in that top spot.
In its January 11, 2013, Crop Production Reports, the USDA increased its estimate of Brazil's 2012-2013 soybean production from 81 million to 82.50 million tons.
Likewise, a private analyst firm in Brazil is estimating soybean production at 82 million tons, at least 20% more than in 2011-12.
With 2012-2013 soybean acreage estimates at 67.43 million, the Brazilian farmers upped this year's plantings by 9.2% vs. a year ago. That record planting was followed by favorable growing conditions for most of the soybean regions.
“All Brazilian regions have had climate conditions better than last season. That's why we have such high numbers in the official and private reports about the summer crop in Brazil, mainly for soybeans,” notes Jose Rocher, a crops editor for Gazeta do Povo, a Brazilian newspaper.
According to Neri Geller, Brazil's secretary of agricultural policy of MAPA, the increase over the previous harvest will position Brazil favorably in the international market.
“We will be the world's largest producer of soybeans for the first time ever, due, in part, to federal government incentives through policies that have facilitated access to credit for producers,” he says.
While harvest of this wall of soybeans is in full swing, farmers in the leading producing state, Mato Grosso, started the season in early January capturing yields averaging between 30 and 48 bushels per acre.
As yields tend to go up as harvest progresses, the soybeans harvested in January will probably be the worst acres of the season.
As far as marketing goes, Brazilian farmers sold over half of this year's soybean crop by the start of harvest season. The rest of the crop will be sold off the combine to the local elevators.
In January, Brazilian domestic prices remained firm. But the market tends to go down as harvest progresses.
Soybean acres to corn
Once this year's soybean crop is taken out of the fields, Brazilian farmers will simultaneously plant a second corn crop. Officially, that crop is labeled as the safrinha corn.
Data show Brazil's first corn harvest is expected to reach 34.73 million tons, which, when added to the second harvest, will total 72.19 million tons, according to Brazil's Ministry of Agriculture.
Like soybean production, the USDA upped its January 2012-2013 estimate of Brazil's corn output at 71 million tons vs. its prior estimate of 70 million tons.
Reports out of Brazil indicate that one third of the soybean acreage will go to safrinha corn, mostly in the states of Mato Grosso and Parana.
“It's a record acreage, but yields are expected to go down, because we had a terrific safrinha corn crop in 2012, with way above-average yields all around,” Rocher says.
Though the crop-season has seen favorable weather, Brazil's soybeans will need a strong finish to the season to achieve the record-size crop that is anticipated. Yield losses are still a possibility, but the projections for Brazil to become the world's top soybean producer are favorable.
Meanwhile, U.S. soybean market analysts remain focused on Brazil's ability to execute its early shipping of soybeans to customers. It appears China purchased several February cargoes.
“Can these leave the Brazilian ports in a timely manner?” asks Sue Mortensen, Advantage Ag.
The shipment times from U.S. ports, especially the Pacific Northwest, are much quicker.