Attache Report on Brazil
- The latest report sees Brazil’s soybean acreage at 38.5 million hectares, which would be up from 36.9 million last year.
- Higher prices are contributing to the boost in area with prices at multi-year highs driving this year’s growth in acreage well above the five-year average.
- The report noted current delays in plantings but was not willing to yet cut back acreage or production totals.
- The agency is penciling in production at 131 million tonnes and exports at 85 million tonnes, which would be a record.
- Crush remains solid for Brazil as does the export outlook.
- Imports are forecast to be up notably for the current marketing year and to be relatively large for the 2020/21 crop year.
FBN’s Take On What It Means: The large crop expected out of Brazil is not surprising. FBN leans towards global demand being strong enough that substantial weakness in prices is not expected outside a much larger crop. Right now, focus is on getting the crop in the ground as we are not off to a good start on planting. That is keeping upside risk in the price outlook for now.
Ukraine Grain Harvest Down
- ProAgro cut its Ukraine 2020 grain harvest forecast to 69.44 million tonnes from the previous forecast of 71.34 million tonnes
- The decrease was mostly due to lower corn production after a drier than normal growing season.
- They projected Ukraine's grain exports could fall to 50.9 million tonnes in the 2020/21 from 55.63 million in 2019/20.
- Ukraine’s ag ministry reported corn harvest at 18% complete and average yields near 4.5 tonnes per hectare which is down from 5.9 tonnes last year.
- ProAgro revised its 2020 corn production forecast down to 31.7 million tonnes from 34 million tonnes last month.
- The projection is significantly below the last USDA estimate of 38.5 million tonnes.
FBN’s Take On What It Means: USDA will update its Ukraine production forecast in the upcoming report. A smaller crop would keep Ukraine’s corn export prices very firm which should drive additional demand toward the US.
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