Raw materials

Background

Brazil forecasts a new record for grain production

The country has up to 3 crops per year due to its climate features.

Brazilian grain production is about to reach the record of 250.54 million tons during this season (2019/20200, or 8.5 million tons (3.5%) more than was harvested in 2018/19. The Conab (National Supply Company) survey adds that the result occurs on a sown area of 65.45 million hectares, with an increase of 2.3 million hectares (3.6%) over the previous harvest.

Photo: Daniel Azevedo
Photo: Daniel Azevedo

The productivity average stands at 3.822 tons per hectare, the third highest in history (3.902 in 2016/2017 season still is the best). The 2 main cultures might achieve new highs. Soybean already has a record production of 120.42 million tons, 4.7% more than the 2018/19 harvest (115.03 million tons). Corn is likely to get 100.99 million tons (increase of 0.9% compared to 100.04 million tons in 2018/19) with an area of 18.5 million hectares.

Soybean super shipment departures Brazil for the Netherlands
The volume of the shipment is one of the largest ever achieved anywhere in the world and is enough to fill 3,400 trucks.

Corn harvest

Those data refer to the 9th survey (of 12) and include almost the entire Brazilian first crop and the second in progress. Brazil has up to 3 crops of corn per year due its climate features. “The first crop is fully harvested, while the second crop is in the process of harvesting and the third crop is finalizing the planting,” informs Conab. To exemplify, those 3 corn harvests should reach 25.43 million tons, 74.23 million tons and 1.33 million tons, respectively. In other words, it will be necessary to observe production performance during the upcoming trimester, during the third crop, in order to close the numbers. Conab explains that the third corn crop comes after establishing itself as a profitable option for producers who take better advantage of the planting window in the Sealba region (Sergipe, Alagoas and northeastern Bahia). The estimate for this year is a harvest of 1.33 million tons.

Futures market
Overview of futures prices for: corn, wheat and soybean

Feather cotton, on the other hand, has an estimated production of 2.89 million tons, 3.9% higher than the previous harvest (2.78 million tons). The rice harvest is nearing its end and its production will get 11.13 million tons, 6.5% higher than the volume produced in the previous harvest (10.45 million tons). In addition, bean production might 3.07 million tons, 1.9% higher than that obtained in 2018/19 (3.02 million tons).

Winter crops

In winter (between June and August), wheat has good prospects, with a 6.7% growth in area and production of 5.7 million tons, depending on the climatic behaviour. The volume produced would represent an increase of 10.4% over the previous harvest (5.15 million tons). Brazil also produces oats, canola, rye, barley, wheat, peanuts, castor beans and triticale that totals 1.3 million tons.