Brazil increased its forecasts for what’s already expected to be a record season for soybean output and exports as farmers expand the planted area while yield prospects rise on above-average rainfall.
Growers may reap between 101.2 million to 102.8 million metric tons of the oilseed in the 2015-2016 season, the agriculture ministry’s crop-forecasting agency, known as Conab, said Tuesday. October’s estimates were 100.1 million to 101.9 million tons and last season’s output was 96.2 million tons. The latest projection, however, fell short of the U.S. Department of Agriculture 100 million-ton crop estimate made last month.
Soybean futures for January delivery on the Chicago Board of Trade fell after the Conab data and were down 0.3 percent to $8.6375 a bushel at 8:24 a.m. local time.
Brazilian farmers are increasing the planting of soybeans, used in everything from animal feed to fruit beverages, by as much as 3.8 percent as the slump in the Brazilian real makes them more competitive on international markets, where the commodity is sold for dollars.
Conab raised its estimate for exports by 2 million tons to 55 million tons. While the latest number represents a 4.5 percent increase from last season’s exports, it’s still below the U.S. Department of Agriculture’s 56.5 million-ton estimate for Brazil’s shipments in the current season.
The expansion of the Brazilian crop will mostly be in areas previously used to cultivate corn as the oilseed is now a more profitable option, Conab said. Soybean yields may rise by 2.9 percent to 3,087 kilograms (6,805 pounds) per hectare, the agency said, as the El Nino weather phenomenon means rainfall should be above average this year in southern states including Parana, Brazil’s second-largest soybean producer.
As more farmers switch to soybeans, corn production is falling. Conab cut its corn output estimates to 81.1 million to 82.7 million metric tons, a decrease of as much as 4.2 percent from last season.
Soybean planting for the 2015-2016 crop started in September and will run until December. Most harvesting occurs January to April. The 2015-16 season officially started in July and lasts until June.