Monday, February 22nd 2016 - 08:28 UTC

Brazil heading for a record crop of 100 million tons of soybeans

As the soybean harvest gets under way in Brazil, analysts are having a clearer picture of whether the forecast record-setting crop will hit the century mark of 100 million tons despite hot and dry weather in Mato Grosso and northeastern Brazil as pods set and fill.

March is the main month for harvesting. Soybeans are booming in Brazil, with this year’s crop expected to be 15% larger than two years ago.

The strong dollar is constraining U.S. exports while Brazil’s Real is weaker which means U.S. soy exports are forecast to shrink while Brazil’s soar by nearly 13%.

 Growers planted nearly 4% more land to soybeans than last season. With slightly above-average yields, that would bring a crop that easily exceeds the 96.2 million tons of 2014/2015, says USDA.

March is the main month for harvesting. Soybeans are booming in Brazil, with this year’s crop expected to be 15% larger than two years ago.

Second to the U.S. as a soybean grower, Brazil is on track to thrash America as the top exporter. Usually, it’s a fairly close race between the nations.

However the strong dollar is constraining U.S. exports at the same time Brazil’s real currency is weaker with the result that U.S. soy exports are forecast to shrink while Brazil’s soar by nearly 13%.

In the end, Brazil could ship as much as 11 million more tons of the oilseed than U.S. exporters. “China will remain the main destination for Brazilian soybeans,” says the U.S. agriculture attaché in Brasilia.

Brazil’s soybean industry formally requested that the Foreign Ministry consider a WTO challenge of U.S. farm supports, specifically U.S. weather insurance and price guarantees, wrote the attaché early this year.

The industry is squeezed by high production costs and low world soybean prices, exacerbated by economic unrest at home. Brazil won a WTO challenge of U.S. cotton subsidies as trade distorting, which forced Congress to rewrite the cotton program in the 2014 farm law.

9 comments Feed

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1 L0B0MAU (#) Feb 22nd, 2016 - 10:50 am Report abuse
“Brazil is on track to thrash America as the top exporter”: Great news indeed! But where is the infrastructure and the adequate port-facilities to export efficiently and cheaply?
2 Jack Bauer (#) Feb 22nd, 2016 - 04:01 pm Report abuse
Exactly. Brazil's seaport infrastructure is beyond criticism, I've been hearing talk of port improvement for more 20 years, but more specifically from the Lula-thief, who back in 2007 'invented' an investment programme known as the PAC (programme for the acceleration of growth), which in 2 phases, has cost Brazil some R$ 750 billion (USD 350 million at the exchange rate at the time), but the only thing that one can see happening, is widespread corruption and and no progress worth talking of. And meanwhile, the lousy infrastructure just contributes to increasing the cost of Brazilian exports.
3 Sinibaldi (#) Feb 22nd, 2016 - 05:22 pm Report abuse
El fervor de la memoria.

En el viñedo
una luz
reaparece
como el
canto de un
diamante
en el limpido
destino.

Francesco Sinibaldi
4 Jack Bauer (#) Feb 22nd, 2016 - 07:13 pm Report abuse
Correction @ # 2

not USD 350 million.....USD 350 BILLION at the exchange rate at the time..
5 Skip (#) Feb 23rd, 2016 - 04:24 am Report abuse
That would have been equal to 50% of the annual federal budget?

Are you sure?

I don't think any country could suddenly direct 50% of its budget at anything.
6 Jack Bauer (#) Feb 23rd, 2016 - 05:02 pm Report abuse
@5 Skip,
The funds mentioned were not intended to be invested in only one, or two, years. Allow me to explain :
The 1st PAC, launched Jan 2007, outlining investments in projects (in areas of social infrastructure, i.e., popular housing & sanitation, transport & logistics, hydro-power etc) to the order of approx. R$ 600 billion ( USD 280 billion at exch rate R$ 2,14), was meant to be executed over the next 4 years (2007-10) ; in 2007, the Federal annual budget was roughly R$ 1,6 trillion (USD 747 billion).
The 2nd PAC, signed by the Lula-thief in March 2010 (in order to leverage Dilma’s election), totaling another R$ 1,59 trillion (USD 893 billion, at exch rate R$ 1,78) contemplated investments in the same areas, and incorporated many projects already foreseen in the 1st PAC, despite the fact that 54% of all projects planned for the 1st PAC, hadn’t even started. R$ 1 trillion was supposed to be invested during Dilma’s 1st term (2011-14), the other R$ 590 billion, until 2020. The Federal annual budget for 2010 was roughly R$ 1,5 trillion (USD 843 billion - already starting to fall, in R$ ). A very ambitious plan, but if well administered could have been viable, but that wasn’t the objective, as it was mainly for show. Anyway, the true figures are far greater than those commonly used (USD 350 billion for both PAC's, due to the various ups and downs of the exchange rate), but considering 2016’s federal budget (R$ 2,95 trillion, equal to USD 740 billion), and all the waste (corruption etc), there is no more money for anything. More proof that they lied from the start and kept it up just long enough for Dilma to be re-elected...but hopefully she'll fold under the pressure.
7 T_Paine (#) Feb 24th, 2016 - 12:19 am Report abuse
Soy is dropping like a rock.
It was barely profitable last year
Maybe the price of oil is saving it but I doubt it since prices are so high in Brazil.

Plus they've ruined their climate for a little bit of U$.

Brazilians are like monkeys will a knife.
www.theguardian.com/world/2016/feb/18/monkey-paraiba-brazil-bar-drinks-rum-takes-knife
8 Jack Bauer (#) Feb 24th, 2016 - 05:28 pm Report abuse
@7
All the monkey wanted was to be left alone with the women.....
9 L0B0MAU (#) Mar 02nd, 2016 - 07:17 pm Report abuse
“a record crop of 100 million tons of soybeans” also means the record losses due to the lack of infrastructure, lack of adequate storage & transport and a lack of the will to prevent such losses.

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