THE BRAZILIAN soybean harvest is progressing well according to last week’s crop update from the country’s National Supply Company (Conab), however, production estimates continue to decline as doubts emerge that production gains in the later sown crops will offset poor output in the early harvested areas.
According to Conab, 29.4pc of the planted soybean area had been harvested as of 17 February, up from 20.9pc seven days earlier and 6.4pc ahead of the 2023 harvest pace. This official estimate is slightly behind that of agribusiness consultancy AgRural, calling the crop 32pc harvested by 15 February, 9pc advanced from the previous week’s report, and up from its estimate of 25pc at the same time last year.
The soybean harvest in Brazil has entered its peak period, with as much as 50pc of the 45 million hectares planted in the 2023/24 campaign expected to be harvested in the four weeks to 20 March. This should see the 2024 harvest more than 80pc complete well before the end of next month. By the end of March last year, the harvest was only 69pc complete, and at the same time in 2021/22, it was 76pc.
In Mato Grosso, Brazil’s biggest soybean-producing state, 65pc of the planted area had been harvested by 17 February, an advance of 13.5pc across the week. This is up from 60pc on 12 February and 7.2pc ahead of the five-year average.
Mato Grosso lower than 2023
The early harvested fields in the mid-north and western regions have had the poorest yields thus far, with the picture progressively improving as the headers moved south and east.
Brazilian agribusiness consultant Agroconsult said the areas planted in the Mato Grosso between the beginning of September and mid-October, which corresponds to around 40pc of the state’s total planted area, were the most affected by high temperatures and low rainfall in the last quarter of 2023 and early 2024. Agroconsult is calling the average state yield 3.15t/ha, 17.7pc lower than last year.
With the early yields proving quite disappointing, Brazilian production estimates continue to decline. Early this month, Conab reduced, by 5.8Mt its January crop estimate of 155.2Mt, to currently 149.4Mt. This is now 3.4pc lower than the 2022/23 crop of 154.6Mt and 7.8pc under Conab’s initial 2023/24 estimate of 162Mt. This projection is lower than Agroconsult, which last week cut its forecast from 153.8Mt to 152.2Mt, but the USDA lags the market sentiment and is still on 156Mt in its February supply and demand update. Conab also trimmed the planted area last week by 200,000 hectares to 45 million hectares.
Row crop production analyst Michael Cordonnier is more pessimistic about Brazil’s soybean production prospects. In last week’s crop update he sliced his estimate by another 2Mt to 145Mt, citing concerns that higher yields from the later maturing crops will not be able to fully compensate for poor yields in the early maturing soybeans. Only a week earlier, Dr Cordonnier’s estimate had been cut by 2Mt, which followed a 4Mt reduction in January. On the whole, he is seeing yields 10 to 20pc lower than early expectations, depending on the location, and has a lower bias moving forward should the disappointing yield trend continue.
Meanwhile, harvesting of the first corn crop and planting of the second corn crop are both progressing well relative to the 2022/23 operations. The summer corn harvest advanced 2.8pc in the week to 17 February to be 21.4pc completed. This is 7.5pc ahead of the same week last year.
Conab is currently calling summer corn production 23.6Mt, down from its January estimate of 24.4Mt and 13.8pc lower than the 2022/23 crop of 27.4Mt. The summer crop, which accounts for around 21pc of total corn output, reportedly faced adverse conditions such as extreme rainfall in the southern states and low rainfall in the central and western growing regions, which, accompanied by high temperatures, have negatively impacted crop yield. Conab has the area at 3.9 million hectares, 11.5pc lower than the 4.4 million hectares seeded in 2022/23.
Safrinha reduction
Safrinha corn output is also declining, with Conab lowering its estimate early in the month by 3.2Mt to 88Mt. This is 13.9pc below the 102Mt safrinha harvest last year. The reduction results from both suboptimal growing conditions, the hot and dry forecast and a lower planted area. Conab has decreased the second corn crop area from 16.4 million hectares last month to 15.8 million hectares in its early February update, 7.6pc lower than the 17.2 million hectares sown by Brazilian farmers’ last season.
Planting of the safrinha corn crop progressed 13.8pc in the week to 17 February to be 45.3pc executed, according to Conab, 12pc ahead of this time last year. AgRural sees the planting program far more advanced, calling it 59pc completed after improving by 21pc over the week.
However, the ideal safrinha corn planting window is generally considered to close on 20 February, which means that a significant proportion of this year’s crop will be seeded outside that window, whichever number you believe. While there is rain forecast for the balance of February, the longer-term guidance for March and April is hot and dry.
Weather through March and April is critical to second-crop yields. The correlation between March/April precipitation and yield performance is strong, particularly in Mato Grosso and Goiás, which collectively account for around 53pc of Brazil’s safrinha corn output. Rainfall of at least 250 millimetres is required across the two months to ensure trend to above-trend yields, especially accounting for the already depleted soil moisture reserves. The lower the March rainfall outcome, the more required in April to set the crop up before the monsoon retreats in early May.
Conab is pegging total 2023/24 corn production at 113.7Mt, 13.8pc lower than its 2023 harvest output of 131.9Mt, once output from the minor third corn crop is added. This compares to Dr Cordonnier’s latest projection of 112Mt, unchanged week-on-week but down from 117Mt at the beginning of January. He has a lower bias, with a continued decline in the planted area, a real possibility if the hot and dry March forecast plays out. The USDA currently leads the forecast field with a prognosis of 124Mt, down from its final 2023/23 number of 137Mt.
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