Brazil's agricultural statistics and supply agency Conab on Thursday raised for the sixth time this year its estimate for the country's 2016/17 soybean crop, now seen at 113.92 million tonnes, up from 113 million tonnes in May's forecast. The agency said total corn output in the season should reach 93.83 million tonnes, above the previous 92.83 million tonnes estimate due to near-perfect weather.
Brazil's total grain crop is seen at a record 234.3 million tonnes, compared to 232 million tonnes seen in May and 25.6 percent more than in the previous season. Grain output in the South American country adds to a global glut that is driving prices lower and pressuring profit margins for farmers and commodities traders worldwide. Brazilian producers have been delaying soy sales in the hope of attaining better prices later, a risky strategy, according to analysts. Soy sales are almost 20 percentage points below levels seen at this time in 2016.
One of the few adjustments downwards in Conab's monthly forecast was for wheat. The agency said the 2017 wheat crop would reach 5.2 million tonnes, stable from a May forecast and lower than 6.72 million tonnes produced in 2016. Conab said farmers opted to produce less wheat this year due to lower prices and high stocks. Neighbor Argentina, the largest supplier of wheat to Brazil, a net importer of the cereal, is also expected to produce a large wheat crop this year. Brazil's cotton production was seen at 1.48 million tonnes (lint weight), stable compared to May but up from 1.29 million tonnes last season.