Home Agribusiness Brazil soybean area to increase again in 2017-18 crop

Brazil soybean area to increase again in 2017-18 crop


Brazilian soy farmers are likely to increase their planted areas for the 2017-18 grains crop (July-June), continuing the trend of expansion in recent years despite a global outlook of oversupply and low prices, analysts surveyed in a Reuters poll said.

The average of nine estimates for the new crop indicated an area planted with the oilseed of 34.7 million hectares (85.7 million acres), 2 percent more than last year. But production was forecast on average at 110.6 million tonnes, 3 percent below the record volume of 114 million tonnes in 2016-17.

According to the analysts (see estimates in the table below), soybeans will be planted in areas previously cultivated with corn, since the cereal is giving even smaller financial returns to farmers than the oilseed. The area increase is also justified by new fields being opened in frontier regions such as the Matopiba (northern Brazil).

The expected fall in production is explained by the improbability of another crop of near-perfect weather over basically all production regions in Brazil, as was the case in 2016/17. “The average of 3.4 tonnes of soy per hectare seen last season is a little bit out of our reality,” said Victor Ikeda, a Brazil-based grains analyst with Dutch bank Rabobank.

He said that in normal weather conditions, average agricultural yields for soybeans should go back to around 3.15 tonnes per hectare. Adriano Gomes, grains market analyst for AgRural consultancy, said he expects a significant soy area expansion in southern Brazil, mainly in Parana state, where farmers would be keen to abandon corn in the summer crop and plant soybeans instead.

That reinforces a trend in the last years for producers in Brazil to focus on soy in the summer crop (main crop) and sow corn in the winter crop (second crop).