Brazil reduces corn and soybean production estimates due to drought

RIO DE JANEIRO, BRAZIL – On Tuesday, Brazil‘s statistics and food supply agency, Conab, downgraded its 2021/2022 season forecasts for domestic soybean and corn production amid a drought that mainly affects crops in the south.

Still, the outlook for the grain season remains positive, with the production of both commodities growing relative to 2021 and exports starting the year strong, according to separate data from Anec, an association representing global grain traders such as Cargill and Bunge.

Conab said Brazil is expected to produce 140.5 million tons of soybeans, down 1.6% from the December forecast, down 2.3 million tons.

The state agency was more conservative than private consulting firms, which reduced soybean production projections by much larger volumes last week.

Conab more aggressively cut Brazil’s total corn production projections for the 2021/2022 season amid dry weather in states like Rio Grande do Sul, where the summer corn crop was severely affected.

The agency projected Brazil’s total corn crop at 112.9 million tons, down 4.2 million tons from the previous forecast.

Despite Conab’s downward revisions, Brazilian farmers are in for another good season, as overall grain production will increase relative to 2021.

Last year, local farmers produced 137.3 million tons of soybeans, a record since Conab records began. Total corn production was 87 million tons last season, the data showed, as winter corn was planted after soybeans were hit by drought and frost.

A larger soybean crop than last year and earlier product availability due to early planting in the key state of Mato Grosso will boost exports in January, increasing the competitive position with the United States.

According to Anec, Brazilian soybean exports in January will reach 4.2 million tons, almost 80 times more than in the same month last year. Corn exports will increase from nearly 500,000 tons to 2.6 million tons in January, Anec said.