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June 24, 2020 | FBN Insights | Kevin McNew

Brazil Corn Estimates Increased

Potential increase to Brazil’s corn crop is yet another blow to prices

Brazil Corn Estimates Increased 

  • Safras & Mercado estimated Brazil’s 2019/20 production at 108.4 million tonnes, up from 101.5 million last month.
  • The planted area for the safrinha crop was increased by 2.5 million acres.
  • The safrinha yield is projected near 90 bushels per acre, 4% higher than Conab’s last estimate. 
  • The estimated production is also significantly higher than the 101 million tonnes projected by USDA in its June report.
  • DERAL reported Parana conditions improved to 44% good to excellent from 42% last week. 

FBN’s Take On What It Means: Increased area and yields in Northern Brazil are more than offsetting lower yields in the south where production struggled due to drier conditions. If realized, a 7 million tonne increase would be a large addition to the world stocks, which were projected to drop 8 million tonnes this year. This potential increase to Brazil’s corn crop is yet another blow to prices.

Russian Wheat Crop Projected Higher

  • Agritel forecast Russia’s 2020 wheat production at 77.5 million tonnes, up 4% from last year.
  • If realized, it would be the second largest crop on record.
  • The consultant expects increased planted area will compensate for lower winter wheat yields due to the dry spring weather.
  • The forecast is in line with USDA’s 77 million tonnes.
  • IKAR raised its estimate of the Russian crop to 79.5 million tonnes.
  • Recently Russia's Agriculture Ministry projected the crop at 75 million tonnes, while SovEcon weighed in at 82 million.

FBN’s Take On What It Means: Recent rains have helped to stabilize the Russian winter wheat crop; the seeded area may be larger than previously expected for winter wheat and at least stable for spring wheat. A bigger Russian crop likely leads to increased exports, especially in the first half of the marketing year, which will provide stiff competition for other origins. About two-thirds of Russia’s wheat crop is winter wheat.  Harvest for winter wheat will begin soon.

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