Brazil's 2017-2018 grain output may drop due to poor weather

Brazilian farmers will likely produce a smaller amount of corn and soya in the 2017/18 season due to less favourable weather than the prior crop year, food supply and statistics agency Conab said on Tuesday. In its first forecast for the 2017/18 crop, Conab estimated Brazilian grain production at between 224.1 million tonnes and 228.2 million tonnes, compared with 238.5 million tonnes in the prior cycle. The lower end of the range would represent a 6 percent drop in output.
"The highly favourable climate conditions that contributed to a record grain output last season are unlikely to be repeated," Conab said in a statement. Soya and corn will account for about 89 percent of Brazil's grains output. The government now expects areas planted with soyabeans in Brazil to grow by an average of 2.7 percent from the prior season to up to 35.2 million hectares.
"Soya has been offering higher liquidity and yield prospects compared with other crops," Conab said. At the same time, the corn area planted in the summer may drop by up to 10.1 percent as more farmers decide to replace lower priced corn with soya crops, Conab said. "Next year's first and second corn crop will be economically viable with reasonable prices giving a minimum remuneration so the producer can make new investments," Neri Geller, secretary for agricultural policy at the Ministry of Agriculture, told reporters following the release of Conab's forecast.
Conab forecast that total grain planting area will be stable or grow by up to 1.8 percent from the prior crop year, with soya and cotton planting contributing to the expansion. The agency predicted Brazil's soya output at between 106 million tonnes and 108.2 million tonnes in the 2017/18 period lower than the 114 million tonnes in the prior cycle.
Conab said total corn output will range between 92.2 million tonnes and 93.6 million tonnes in the 2017/18 period, lower than the 97.8 million tonnes in the 2016/17 crop cycle. Dry weather has slowed grain planting in Brazil early in the season. Through October 5, farmers had sowed only 5 percent of the soya area, compared with 11 percent at the same time a year ago but in line with a five-year average of 6 percent. "We have had some problems especially in the Center-West where rains were significantly late," Geller said.