Record soybean crop anticipated | Production in Argentina and Brazil affects global prices
Corn and soybean markets are focused on U.S. production but it won’t be long before the gaze shifts to South America.
When it does, the markets will see the potential for increased soybean production and decreased corn output, according to two U.S. Grains Council consultants.
What happens with those two crops in South America will influence the prices of canola, wheat and other crops grown in Western Canada.
Summer corn planting usually starts around mid-August in Brazil and Argentina. Soybean planting begins in mid-September in Brazil and early October in Argentina.
Planting of both crops has been delayed due to dry conditions in key states and provinces.
Delays in corn planting and lackluster prices will likely result in corn land shifting to soybeans in both countries, say analysts.
“There will be a significant reduction in corn summer area,” Alfredo Navarro, the USG’s consultant in Brazil, said in an email response to questions provided by The Western Producer.
He is forecasting a 15 percent or 1.7 million acre reduction in summer corn plantings, which will likely result in four million fewer tonnes of summer corn than 2012-13.
The U.S. Department of Agriculture forecasts 72 million tonnes of summer and winter corn production in Brazil. Navarro believes that reduction is too drastic. He predicts 74.5 million tonnes of production.
Dolores Rodriguez Pareja, the USG’s consultant in Argentina, forecasts 8.55 million acres of corn, down six percent from last year.
Eight percent of summer corn acres have been planted, down nine percent from last year’s seeding pace, she said in an email.
Rodriguez Pareja believes 250,000 acres will be switched from corn to soybeans due to soybean prices holding up better than corn. Corn is also 2.5 times more expensive to plant.
Soybeans may pick up an additional 450,000 acres from sunflowers, which were not planted due to drought in northeastern Argentina.
The U.S. Department of Agriculture is forecasting 26 million tonnes of corn production in Argentina, down slightly from the 26.5 million tonnes produced last year.
Rodriguez Pareja said 26 million tonnes is possible if farmers achieve trend-line yields.
The USDA is forecasting 88 million tonnes of soybean production in Brazil, up from 82 million tonnes last year.
Navarro believes that is a reasonable estimate. Brazil’s National Institute of Meteorology forecasts normal summer weather in the two main soybean-producing states of Mato Grosso and Goias.
He is optimistic about 2013-14 soybean export prospects.
“There are indications that China will be in the market buying a lot. Brazilian real (currency) devaluation also increases competitiveness of Brazilian beans,” said Navarro.
The USDA is forecasting 53.5 million tones of soybean production in Argentina, up from 49.4 million tonnes last year.