Brazil slashed its estimate for domestic corn output after drought and frost hurt the crop. Projected soybean production is also smaller than previously expected.
Brazil’s crop agency Conab said Thursday it now estimates corn production at 69.1 million metric tons for the current season, down from a June estimate of 76.2 million tons. The average estimate of five analysts surveyed by Bloomberg was for 75.9 million tons. Output is now seen falling 18 percent from last season’s 84.7 million tons.
Recent months have seen below-average rainfall in the main corn-producing states including Mato Grosso, Brazil’s top producer, followed by frost in southern states including Parana, the second-largest grower. The adverse weather caused Brazil’s winter corn yield to tumble 27 percent to 4.174 kilograms (9.202 pounds) a hectare, the worst result since the 2010-11 season, according to Conab’s historical data.
Limited domestic corn supplies are curbing exports, which are forecast to fall 27 percent to 22 million metric tons from the prior season. Trading companies have been diverting corn to the local market from exports as they adjust to inventory levels, Conab said.
Still, some consumers in Brazil, which is typically a net exporter of the grain, are buying from other countries amid a spike in domestic prices.
Soybean production reached 95.3 million tons in 2015-16, down from the June estimate of 95.6 million tons, according to Conab. The latest Conab estimate is also less than the 96.9 million-ton average estimate of six analysts surveyed by Bloomberg.
Average soybean productivity is seen at 2,876 kilograms a hectare, down 4 percent from last season. Soybeans exports are seen little changed this year at 54 million tons.