Conab revises up Brazil 2020-21 soybean output forecast on higher acreage

Brazilian soybeans output forecast for 2020-21 marketing year (February 2021-January 2022) has been revised higher than the previous estimate because of higher acreage, Brazil’s national agricultural agency Companhia Nacional de Abasteciment said March 11.

Brazilian soybean output is projected at 135.1 million mt, up 1% from the February estimate and 8.2% from the prior year, Conab said. Backed with favorable rains since December, the soybean acreage has been revised 0.5% higher month on month and 4.1% year on year to 38.46 million hectares, the report said.

According to the analysts, an upward revision in Brazil’s soybean output forecast is likely to pressure US soybean prices as the average market estimate in March was seen at 133 million mt.

Delayed Planting, Harvest

The planting season for Brazilian soybean went off to the slowest start in a decade on extremely dry weather conditions. As a result, almost a month’s delay in sowing the soy seed was noted in most regions of the country during fourth-quarter 2020.

There were early season speculations that Brazil’s soybean output could be revised down from initial analysts’ estimates of 135 million mt to as low as 128 million mt as delayed planting and La Niña were likely to make the oilseed crop vulnerable to heat in December and January.

But a Pacific storm system has neutralized La Niña’s impact in Brazil, leading to heavy showers since mid-December.

According to the analysts, although the rainfall in recent weeks has been extremely beneficial to the development of late-planted soybean crops, it has crippled the harvesting activities across Brazil.

Brazil’s soybean harvest for 2020-21 has been at the slowest pace since 2010-11 on heavy rains across the central parts, country’s top producing regions, agricultural consultancy AgRural said. Soybean farmers had harvested 35% of the projected acreage as of March 4, compared with 49% in the same period last year, it said.

Delayed Brazilian harvest has boosted the domestic oilseed prices, Conab said. Average February prices were seen 101% higher year on year, it said.

Brazilian soybean exports for 2020-21 was forecast at a record 86.1 million mt on strong demand from China, the report said. While the domestic crush is seen estimated between 45 million mt and 49 million mt.

In Brazil, high domestic soybean demand and prices are likely to persist on economic recovery from the coronavirus pandemic, increased meat exports, and higher biodiesel usage on the B13 mandate, Conab said.

Soybean meal is used extensively as livestock feed, while 80% of soybean oil is used as an ingredient in biodiesel.
Source: Platts