Conab’s Brazilian Corn and Soybean Crop Estimates
- Brazil corn production was forecast at 101 million tonnes, down from 102.3 million forecast last month, but still above 100 million last year.
- A reduction of 900,000 tonnes in Parana and 500,000 tonnes in Goias made up most of the decline.
- The corn crop forecast is in line with last month’s USDA forecast of 101 million tonnes, which will be updated this Thursday.
- The agency projects the bean crop at 120.4 million tonnes, up slightly from 120.3 million last month, but up 4.7% from last year’s 115 million.
- The USDA’s May projection was for 124 million tonnes, and the average analysts’ expectation sees that declining to 123 million tonnes in June.
FBN’s Take On What It Means: The bean crop estimate is little changed as an increase in production for Mato Grosso offset a sharp decline in Rio Grande Do Sul. Conab’s corn production forecast weighed on the market as many in the trade expected a larger decline. The average analysts’ estimate is for 99.4 million tonnes within a range of 96 - 102 million in the USDA’s June report.
ABARES Report Released and the Wheat Number is Big
- Wheat production is forecast at 26.7 million tonnes.
- That would be up over 10 million from last year’s harvest at 15.2 million.
- The increase is two fold - higher planted area and an assumption of near-normal weather for the growing season.
- Canola production is seen at 3.2 million tonnes, also higher for the year.
- Barley production is forecast at 10.6 million, which is higher.
- The oat crop is expected to rebound to 15.6 million tonnes.
FBN’s Take On What It Means: The higher wheat outlook pressured futures on Tuesday. But, if Australia’s weather does cooperate, this will mean more competition on the wheat export market. Overall, the larger Australia numbers are viewed as bearish for global commodities, but particularly for wheat. Australian wheat will compete with US white wheat heading to Southeast Asia.
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