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.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)