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South America 2012

With declining yields and crop size prospects for the U.S., the world's attentions turns to South America. Strong domestic prices in Brazil, Argentina, and Paraguay are encouraging farmers to expand both first-crop corn and soybean acreage. With some early planting in September in parts of the three Latin American countries, fieldwork rolls on through the end of November.

In Brazil, private forecasts indicate that southern states of Parana and Rio Grande do Sul will increase their full-season corn acreage at the expense of soybean acreage, reversing a three-year downward trend. Farmers in center-west Brazil eye more soybeans in 2012.

According to those estimates, soybean-planted area will rise about 3% nationwide in the coming season, reaching approximately 62 million acres. Total full-season corn acreage in Brazil is expected to increase about 4% and surpass 20 million acres in 2011/12. If planting figures are realized, and considering trend line yields, the country could harvest another bumper crop in 2011/12. Brazil's soybean crop is projected at a record 2 billion bushels, while the full-season corn crop is pegged at 915 million bushels.

“Corn plantings will grow faster than the dominant soybean crop in 2011/12. And those farmers who will not plant full-season corn want to sow their soybeans as soon as they can to allow enough time to plant a second crop of corn after the beans are harvested,” says Otmar Hubner, a technical specialist at Parana's agricultural secretariat, or Seab.

“Domestic corn prices are currently 40% higher than they were one year ago in my region, and I'm investing in a high-tech corn crop to have excellent results this summer,” says farmer Gilmar Castaldelli Chamberlain. “The market is pretty much guaranteed. The challenge is to beat the weather. With favorable conditions throughout the growing season, I expect average yields of 200 bushels per acre.”

Argentina and Paraguay

Strong corn prices and tight world supplies are also encouraging Argentine and Paraguayan farmers to plant more grains in 2011/12.

Corn planting in Argentina will rise 10% to a record 10.6 million acres, and the soybean area will climb 3% to 48.2 million acres. According to Agriculture Secretary Lorenzo Basso, if achieved, this would put corn production at a record 762 million bushels and the soybean crop in the range of 1.36 to 1.41 billion bushels.

In Paraguay, soybean production should rise to 228.8 million bushels, up 13% from last season. Planting is under way, and government officials project a 7% increase in acreage to 7.1 million acres.

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