Unfavourable weather conditions have dampened CONAB’s outlook for the 2017/18 soybean season following a bumper harvest last year, Brazil’s national agricultural supply institute showed in this week’s data release.
CONAB expect Brazil to produce 107mn t of soybeans this harvest season, down 6% from the record 114mn t harvested last year. The estimate is in line with USDA’s Brazilian soybean projections for this harvest season, with Brazil’s vegetable oil association Abiove also expecting production for the calendar year 2017 to be down on the previous year. USDA says yields for this harvest season will be below last year’s record highs which were helped by a low incidence of pest damage to crops, even rainfall distribution, and increased investment in technology through the season.
CONAB’s survey of producers showed an expected to increase of between 1.6% -3.8% YoY to 34.4mn ha -35.2mn ha, fuelled by strong demand for Brazilian soybeans both in the domestic and export markets, making the oilseed a more profitable proposition than corn, even with both prices seen lower than year ago levels. Despite lower production costs expected this season, a weaker global soybean complex is expected to see Brazilian soybean producers’ gross income fall 13% YoY, barely allowing them to break even.
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