USDA Brazil estimates remain far above Conab

Reuters’ Karen Braun reported Wednesday that “benchmark industry estimates of top exporter Brazil’s soybean crop have deviated even further from each other this month following a season blemished by questionable weather. That same controversy may be brewing for the country’s corn crop, especially with unfavorable conditions potentially on tap for Brazil’s top production state.”

Despite making cuts to its Brazil soybean production estimate and holding its corn production estimate steady in the March World Agricultural Supply and Demand Estimates (WASDE) Report, USDA estimates of crop production in Brazil remain well above Conab estimates released Monday.

The WASDE reported pegged Brazil soybean production at 155 million metric tons, a little more than 8 million metric tons higher than Conab’s estimate of 146.858 MMT. The WADSE report pegged Brazil corn production at 124 MMT, a little more than 11 MMT above Conab’s estimate of 112.753 MMT.

The USDA’s soybean estimate, in particular, also “remains above many private estimates,” according to reporting from Reuters’ Tom Polansek.

“Recent estimates by private firms have ranged from 143.92 million tons from consultancy AgResource to 151.5 million from StoneX,” Polansek reported. “The varying estimates reflect how unpredictable weather and different methodologies for assessing the crop make it difficult to estimate the country’s output this season.”

Conab Estimates

Reuters’ Ana Mano reported on Tuesday that Brazilian crop agency Conab made its cut this month “as soy farmers dealt with adverse weather in large-producing regions and corn growers are poised to reduce plantings.”

“Conab said soy yields were well below expectations in the center west due to unfavorable weather conditions in the beginning of the soybean cycle,” Mano reported. “‘The yields obtained in crops sown from November improved the mood of producers, even though they were unable to reverse already consolidated losses,’ Conab said.”

“In states where the soy was sown later, such as Maranhao, Piaui and Para, rainfall has favored the development of soy crops, Conab noted,” according to Mano. “In Brazil’s southernmost state of Rio Grande do Sul, fields lacked rains between the end of January and the beginning of February. As rains returned, Rio Grande do Sul’s soy prospects improved but soy rust disease became a concern, Conab said.”

USDA Estimates

“The USDA pegged Brazil’s harvest at 155 million metric tons, compared to its February estimate of 156 million and analysts’ expectations for 152.28 million,” Polansek reported. “The agency said harvest results in the state of Parana and poor weather conditions in São Paulo were offset by favorable conditions in other areas.”

Another reason for the cut in the soybean production estimate, according to the USDA’s March World Agricultural Production report, is continued expectations of lower yield.

“Yield is estimated below the 10-year trend at 3.38 tons per hectare (t/ha), down 1 percent from last month’s yield, and down 7 percent from last year’s record yield,” the report said. “Current harvest results led to the lower production this month.”

Polansek reported that Jake Hanley, managing director of Teucrium Trading said that “USDA is going to be slow on changing the soybean numbers out of South America going forward. Now we’re moving on to the U.S. growing season for market moving news and activity.”